Can a Hyper Kidz franchisee engage in party bookings through the Hyper Kidz website?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
re this business any facilities located or operating within your Designated Territory will not use the Marks.
You may sell our products and services to customers who live anywhere but who choose to use your Franchised Business. You may not engage in any promotional activities or sell our products or services, whether directly or indirectly, through or on the internet, the world wide web, or any other similar proprietary or common carrier electronic delivery system, except for party bookings made through our website; through catalogs or other mail order devices sent or directed to customers or prospective customers located anywhere; or by telecopy or other telephonic or electronic communications, including toll-free numbers, directed to or received from customers or prospective customers located anywhere. While you may place advertisements in printed media and on television and radio that are targeted to customers and prospective customers located within your Designated Territory, you will not be deemed to be in violation of the Franchise Agreement if those advertisements, because of the natural circulation of the printed media or reach of television and radio, are viewed by prospective customers outside of your Designated Territory. You may not make any sales or deliver any products to customers located outside of your Designated Territory unless the customer is located in an area where there is no Hyper Kidz Business in operation. You may not directly solicit customers outside of your Designated Territory. You may not sell any products to any business or other customer at wholesale.
During the term of your Franchise Agreement, if we have a prospective franchisee who is interested in establishing a Hyper Kidz Business in an area that is contiguous to your Designated Territory, we may offer you a right of first refusal to purchase the Franchised Business and establish it in the proposed area. We may offer you this right of first refusal if you are in full compliance with the Franchise Agreement, if all fees owed to us have been paid in full and have not been late during the immediately preceding 12 month period, and if we believe you are financially capable of constructing and operating another Hyper Kidz Business.
Source: Item 12 — TERRITORY (FDD pages 33–36)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees are permitted to engage in party bookings through the Hyper Kidz website. The FDD specifies that franchisees may promote and sell products or services through the internet, specifically for party bookings made through the Hyper Kidz website. This allowance provides an avenue for franchisees to leverage the brand's online presence to attract and secure party bookings, which can be a significant revenue stream for an indoor recreation business.
However, the FDD also clarifies that any sales made directly through the Hyper Kidz website are fulfilled by Hyper Kidz or its affiliates, and the franchisee will not receive any portion of the revenue from these sales, even if the order originates from or is delivered to an address within the franchisee's designated territory. While franchisees can take party bookings through the website, the actual fulfillment and revenue from general website sales are retained by Hyper Kidz.
Hyper Kidz intends to forward all inquiries generated through their website to the appropriate Hyper Kidz location. If a franchisee receives an inquiry and chooses not to respond or fulfill the request, Hyper Kidz, its affiliate, or another franchisee may fulfill the request instead. All leads generated through the website remain the property of Hyper Kidz. This means that while franchisees can benefit from party bookings through the website, they must actively engage with and fulfill the inquiries they receive to capitalize on these opportunities, or risk losing the potential revenue to others in the Hyper Kidz system.