For Hyper Kidz franchisees, what constitutes an event of default under the Franchise Agreement related to the Authorization Agreement Automatic Deposits?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
18.2.10 You knowingly maintain false books or records, or knowingly submit any substantially false report to us;
18.2.11 You cause or permit to exist a default under the lease or sublease for the Site and fail to cure such default within the applicable cure period set forth in the lease or sublease;
18.2.12 You or any of your Principals fail on three (3) or more separate occasions within any period of twelve (12) consecutive months to comply with this Agreement or any mandatory specification, standard or procedure we prescribe, whether or not such failures to comply are corrected and whether or not notice of such default is given (including insufficient funds fees); or fail on two (2) or more separate occasions within any period of twelve (12) consecutive months to comply with the same requirement under this Agreement, whether or not such failures to comply are corrected or whether or not notice of such default is given;
18.2.13 You fail to purchase or maintain any insurance required by this Agreement or fail to reimburse us for our purchase of insurance on your behalf within fifteen (15) days of delivery to you of our written demand for reimbursement;
18.2.14 A threat or danger to public health or safety results from the construction, maintenance or continued operation of the Hyper Kidz Business;
18.2.15 You refuse us permission to inspect the Hyper Kidz Business, or your business, books, records or other documents pursuant to this Agreement;
18.2.16 You or any of your Principals interfere or attempt to interfere with our ability to franchise or license others to use and employ the Marks or System;
18.2.17 You or any of your Principals interfere or attempt to interfere with our contractual relations with other franchisees, customers, suppliers, employees, advertising agencies or other third parties;
18.2.18 A Franchise Agreement between us or any of our Affiliates and you, or an Affiliate of any of the above, is terminated by us pursuant to such agreement or is terminated by you in a manner or for a reason that is not expressly authorized pursuant to such agreement;
18.2.19 You fail to comply with all applicable laws and ordinances relating to the Hyper Kidz Business, including Anti-Terrorism Laws, or if your or any of your Principals' assets, property, or interests are blocked under any law, ordinance, or regulation relating to terrorist activities, or you or any of your Principals otherwise violate any such law, ordinance, or regulation;
18.2.20 We perform corrective work on your Hyper Kidz Business for health and/or safety purposes and you do not reimburse us when so required;
18.2.21 Any permit or license required for the operation of the Hyper Kidz Business is revoked; or
18.2.22 If you or any of the Principals purport to transfer any rights or obligations under this Agreement or any interest in you or the Hyper Kidz Business to any third party without our prior written consent or without offering us a right of first refusal with respect to such transfer, contrary to the terms of Article 16 of this Agreement.
18.3 Cross-Defaults, Non-Exclusive Remedies, etc.
Any default by you (or any person/company affiliated with you) under this Agreement may be regarded as a default under any other agreement between us (or any Affiliate of ours) and you (or any Affiliate of yours). Any default by you (or any person/company affiliated with you) under any other agreement, including, but not limited to, any lease and/or sublease, between us (or any Affiliate of ours) and you (or any person/company affiliated with you), and any default by you (or any person/company affiliated with you) under any obligation to us (or any Affiliate of ours) may be regarded as a default under this Agreement. Any default by you (or any person/company affiliated with you) under any lease, sublease, loan agreement, security interest or otherwise, whether with us, any Affiliate of ours and/or any third party may be regarded as a default under this Agreement and/or any other agreement between us (or any Affiliate of ours) and you (or any Affiliate of yours).
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
Based on the 2024 Hyper Kidz Franchise Disclosure Document, the provided excerpts do not detail specific events of default related to the Authorization Agreement for Automatic Deposits. However, the document does outline general events of default that could potentially apply if a franchisee fails to meet their financial obligations or comply with the agreement's terms.
Item 22 lists several events that can trigger a default under the Franchise Agreement. These include knowingly maintaining false books or records, defaulting on the site lease, repeated non-compliance with the agreement, failure to maintain required insurance, and violation of applicable laws. Additionally, cross-default provisions state that a default under any agreement between the franchisee and Hyper Kidz (or its affiliates), such as a lease or loan agreement, can be considered a default under the Franchise Agreement.
To understand the specific events of default related to the Authorization Agreement for Automatic Deposits, prospective Hyper Kidz franchisees should carefully review the full Franchise Agreement and related exhibits. It is essential to clarify with the franchisor what specific actions or omissions related to automatic deposits would constitute a default and what the potential consequences of such a default would be. This information is crucial for managing the franchise and avoiding potential breaches of contract.