How will a Hyper Kidz franchisee be notified if the non-compete covenants are reduced?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.4 You understand and acknowledge that we shall have the right, in our sole discretion, to reduce the scope of any covenant stated in Sections 12.1 and 12.2 or any portion thereof, without your consent, effective immediately upon receipt by you of written notice thereof, and you agree that you shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 16 hereof.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Hyper Kidz has the right to reduce the scope of the non-compete covenants outlined in Sections 12.1 and 12.2 of the agreement. If Hyper Kidz decides to reduce the scope of these covenants, the franchisee will receive written notice.
Upon receiving this written notice, the reduction in scope becomes effective immediately, and the franchisee is required to comply with the modified covenants. This means that the franchisee's obligations regarding non-competition can change during the term of the agreement at Hyper Kidz's discretion.
This clause is important for potential franchisees to consider, as it gives Hyper Kidz considerable flexibility in defining the non-compete obligations. The franchisee must comply with these changes, and the modified covenants are fully enforceable, regardless of Section 16 of the agreement. This could impact the franchisee's future business activities should they decide to leave the Hyper Kidz system.