Is a Hyper Kidz franchisee required to participate in all advertising and public relations programs conducted by the Fund?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- (c) You must participate in all advertising and public relations programs conducted by the Fund.
The Fund may furnish you with samples of certain marketing, advertising and promotional formats and other such materials without charge.
We will not spend any contributions to the Fund on advertising that is a solicitation of new franchisees.
- (d) All sums paid by franchisees to the Fund, plus income earned from the Fund, shall be maintained in an account separate from our other funds and shall not be used by us for any purposes other than those provided for herein.
Upon your request, we shall, within one hundred twenty (120) days following the close of each fiscal year, prepare and distribute to all franchisees an unaudited statement detailing Fund income and expenses for such fiscal year.
- (e) We may spend, in any fiscal year, an amount greater or less than the aggregate contribution of all Hyper Kidz Businesses to the Fund in that year.
The Fund may borrow from us or other lenders at standard commercial interest rates to cover deficits of the Fund or cause the Fund to invest any surplus for future use by the Fund.
Any monies remaining in the Fund at the end of any fiscal year shall carry over to the next fiscal year.
(f) You authorize us to collect for remission to the Fund any advertising or promotional monies or credits offered by any supplier based upon purchases by you.
(g) We will have the right to cause the Fund to be incorporated or operated through an entity separate from us at such time as we deem appropriate, and such successor entity shall have all our rights and duties pursuant to this Section.
(h) You understand and acknowledge that the Fund is intended to maximize recognition of the Marks and patronage of Hyper Kidz Businesses generally.
Although we will endeavor to utilize the Fund to develop advertising and marketing materials and programs and to place advertising in order to benefit all Hyper Kidz Businesses, we undertake no obligation to ensure that expenditures by the Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Fund by Hyper Kidz Businesses operating in that geographic area or that any Hyper Kidz Business will benefit directly or in proportion to its contribution to the Fund from the development of advertising and marketing materials or the placement of advertising.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees are required to participate in all advertising and public relations programs conducted by the Fund. This means that as a Hyper Kidz franchisee, you must take part in any advertising or PR initiatives that the franchisor's fund organizes.
This participation is mandatory, indicating that Hyper Kidz wants a unified brand presence and consistent marketing strategy across all franchise locations. The Fund may provide marketing, advertising, and promotional materials to franchisees without charge.
Franchisees should be aware that the advertising fund is intended to maximize recognition of the Hyper Kidz brand and patronage of all Hyper Kidz businesses. While the franchisor aims to benefit all locations, there's no guarantee that the expenditures will be proportionate to each franchisee's contribution or that each franchisee will directly benefit in proportion to their contribution.
Hyper Kidz also retains the right to terminate the Fund, provided that all monies in the fund have been spent for advertising and promotional purposes. This gives Hyper Kidz flexibility in managing its advertising and marketing strategies, but franchisees should be aware that the Fund's existence is not guaranteed indefinitely.