Does the Hyper Kidz franchise agreement allow franchisees to incur any debt in the name of Hyper Kidz?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
15.7 You Are Not Authorized
You understand and agree that nothing in this Agreement authorizes you or any of the Principals to make any contract, agreement, warranty or representation on our behalf, or to incur any debt or other obligation in our name or the Marks, and that we shall in no event assume liability for, or be deemed liable under this Agreement as a result of, any such action, or for any act or omission of you or any of the Principals or any claim or judgment arising therefrom.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, franchisees are not authorized to incur any debt in the name of Hyper Kidz. The franchise agreement explicitly states that nothing within the agreement authorizes franchisees or their principals to make any contract, agreement, warranty, or representation on behalf of Hyper Kidz.
This provision protects Hyper Kidz from liability for any debts or obligations incurred by the franchisee. It ensures that Hyper Kidz will not be held responsible for any financial commitments made by the franchisee without express written authorization. This is a standard clause in most franchise agreements, designed to maintain a clear separation between the franchisor's and franchisee's financial responsibilities.
As a prospective franchisee, it is crucial to understand this limitation. You must ensure that all financial arrangements for your Hyper Kidz business are made in your own name and that you do not represent yourself as having the authority to incur debt on behalf of Hyper Kidz. Failure to adhere to this provision could result in a breach of the franchise agreement and potential legal consequences.