After the Hyper Kidz franchise is terminated or expires, for how long are franchisees restricted from involvement in a Competitive Business?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
---------------------|-------------| | (a) Length of the franchise term | Section 3.1 | 10 years |
| Provision | Section or Article in Franchise Agreement | Summary |
|---|---|---|
| (q) Non-competition covenants during the term of the franchise | Article 9 and Section 11.7.3 | No involvement by you and members of your immediate families in a Competi |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 41–49)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, both the Franchise Agreement and the Multi-Unit Development Agreement contain non-competition covenants that apply after the franchise is terminated or expires. Specifically, franchisees and their immediate family members are restricted from involvement in a Competitive Business for a period of two years.
This restriction applies within a 15-mile radius of the former Franchised Business location or any other Hyper Kidz Business in the System. A Competitive Business is defined as one that offers the same or substantially similar products and services as those offered by a Hyper Kidz Business.
This means that after the franchise agreement ends, a former Hyper Kidz franchisee cannot operate or be involved in a similar business within the specified geographic area for the two-year duration. This type of restriction is common in franchising to protect the brand and prevent franchisees from using the franchisor's knowledge and resources to compete against the system after leaving.