After the Hyper Kidz franchise is terminated or expires, what is the geographic radius within which franchisees are restricted from involvement in a Competitive Business?

According to Hyper Kidz's 2024 Franchise Disclosure Document, if the franchise is terminated or expires, franchisees and their immediate family members are restricted from involvement in a Competitive Business for two years. This restriction applies within a 15-mile radius of the previously Franchised Business location or any other Hyper Kidz Business in the System.

This non-compete clause means that a former Hyper Kidz franchisee cannot operate or be involved in a similar business that offers the same or substantially similar products and services as Hyper Kidz within the specified geographic area and time frame. This is designed to protect Hyper Kidz's market share and brand reputation by preventing former franchisees from using their knowledge of the Hyper Kidz system to compete against it.

For a prospective franchisee, this restriction is an important consideration. It limits their options if they decide to leave the Hyper Kidz system. They would need to either wait out the two-year period, relocate outside the 15-mile radius, or pursue a completely different type of business to avoid violating the non-compete agreement. Franchisees should carefully evaluate this restriction and its potential impact on their future business endeavors before investing in a Hyper Kidz franchise.

It is also important to note that there are separate non-competition covenants during the term of the franchise. During the franchise term, franchisees and their immediate family members cannot be involved in a Competitive Business anywhere. If the franchisee is a corporate entity, they may not engage in any business other than the development and operation of Hyper Kidz Businesses.