Is a Hyper Kidz franchisee required to use the designated accountant for accounting services?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
You shall establish and maintain, at your own expense, a bookkeeping, accounting, record keeping and records retention system conforming to the requirements prescribed by us from time to time, which includes you obtaining and maintaining a point of sale or computer system ("computer system") that we specify or approve. Each transaction of the Hyper Kidz Business shall be processed on the computer system in the manner we prescribe. We shall have at all times the right to access the computer system and all data processed on the computer system with respect to the Hyper Kidz Business, including, without limitation, your membership and customer database. You shall take such action as may be necessary to provide such access to us, at your expense. You understand and agree that your membership and customer database will, at all times, remain our property and that you shall be an authorized user of such database during the term of this Agreement. In no event shall you retain a copy of such database after the termination or expiration of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
Based on the 2024 Hyper Kidz Franchise Disclosure Document, franchisees are not explicitly required to use a designated accountant for accounting services. However, Hyper Kidz mandates a specific bookkeeping, accounting, record keeping, and records retention system. This system must conform to Hyper Kidz's requirements, which includes obtaining and maintaining a point of sale or computer system that Hyper Kidz specifies or approves.
Hyper Kidz retains the right to access the franchisee's computer system and all data processed within it, including membership and customer databases. Franchisees must provide this access at their own expense. The FDD specifies that the membership and customer database remains the property of Hyper Kidz, with the franchisee being an authorized user during the term of the agreement.
Franchisees are required to furnish various reports regarding the operation and financial condition of their Hyper Kidz Business. These reports include monthly income statements, quarterly profit and loss statements and balance sheets, and annual fiscal year-end balance sheets and profit and loss statements. All reports and statements must be prepared in accordance with generally accepted accounting principles. While Hyper Kidz does not mandate a specific accountant, the detailed reporting requirements and system specifications suggest that franchisees may benefit from using an accountant familiar with franchise operations and GAAP standards to ensure compliance.