Does the Hyper Kidz franchise agreement bind the successors and assigns of the franchisor?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
We shall have the right to assign this Agreement and all of our attendant rights and privileges to any person, firm, corporation or other entity provided that, with respect to any assignment resulting in the subsequent performance by the assignee of our functions: (i) the assignee shall, at the time of such assignment, be financially responsible and economically capable of performing our obligations; and (ii) the assignee shall expressly assume and agree to perform such obligations.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, Hyper Kidz has the right to assign the Franchise Agreement to another entity. Specifically, Hyper Kidz can transfer the agreement and all associated rights and privileges to any person, firm, corporation, or other entity.
However, there are two conditions that must be met for this assignment to be valid. First, the entity taking over the agreement must be financially responsible and capable of fulfilling Hyper Kidz's obligations under the agreement at the time of the assignment. Second, the entity must expressly agree to take on and perform those obligations.
This clause ensures that if Hyper Kidz sells the franchise system or transfers its rights, the new entity is bound by the existing agreements with franchisees, providing some continuity and protection for the franchisee's investment. It is a fairly standard clause in franchise agreements to allow for such transfers, but the conditions outlined provide some assurance of the assignee's capability and commitment.