Does the Hyper Kidz franchise agreement specify that all obligations survive expiration or termination, or only those that expressly or by their nature are intended to survive?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
19.5 Continuing Obligations
All obligations of ours and yours which expressly or by their nature survive or are intended to survive the expiration or termination of this Agreement shall continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied in full or by their nature expire.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, not all obligations survive the expiration or termination of the franchise agreement. The agreement specifies that only obligations that expressly or by their nature are intended to survive will continue after the agreement's expiration or termination. This means that certain obligations, due to their inherent nature or explicit terms, remain in effect even after the franchise relationship ends.
For a prospective Hyper Kidz franchisee, this distinction is important. It means that you need to understand which obligations continue after the franchise term and which ones cease. Examples of obligations that typically survive termination or expiration include those related to confidential information, non-compete agreements, and the payment of outstanding debts.
Specifically, Hyper Kidz franchisees should pay close attention to Article 19.3 regarding Confidential Information and 19.4 covering the Covenant Not to Compete, as these are common examples of clauses that extend beyond the term of the agreement. Additionally, Article 19.1 requires immediate payment of all outstanding debts to Hyper Kidz and its affiliates upon termination or expiration. Understanding these continuing obligations is crucial for planning your exit strategy, whether it's through renewal, sale, or termination of the franchise.