Must Hyper Kidz franchisees participate in all advertising and public relations programs conducted by the Brand Development Fund, even if they disagree with the creative direction?

According to Hyper Kidz's 2024 Franchise Disclosure Document, franchisees are required to participate in all advertising and public relations programs conducted by the Brand Development Fund. Hyper Kidz retains sole discretion over the creative concepts, materials, endorsements, and the geographic, market, and media placement and allocation of these programs. This means that franchisees must participate in these programs even if they disagree with the creative direction.

The Brand Development Fund is used to cover various costs, including developing marketing ideas, conducting market research, preparing marketing and public relations campaigns, creating advertising materials, and providing technical advice. Hyper Kidz can also reimburse itself from the Fund for costs related to developing and distributing advertising materials and collecting the Brand Development Fee, including salaries for employees involved in Fund-related activities. The Fund is maintained in a separate account, and any money remaining at the end of the year carries over to the next year.

Hyper Kidz aims to maximize recognition of its marks and patronage of Hyper Kidz businesses through the Fund. While Hyper Kidz will attempt to use the Fund to benefit all businesses, it is not obligated to ensure that expenditures in any geographic area are proportionate to the contributions from businesses in that area. Franchisees are still obligated to contribute to the Fund, even if they do not directly benefit from specific advertising or marketing efforts. Hyper Kidz does not have a fiduciary obligation to franchisees regarding the Fund's establishment, collection, control, or administration.

Hyper Kidz also has the right to terminate the Fund at any time, but only after all money in the Fund has been spent on advertising and promotional purposes. They can also reinstate the Fund at any time, maintaining it as described in the Franchise Agreement. Franchisees should be aware that their contributions to the Brand Development Fund are mandatory, and they must participate in the advertising and public relations programs, regardless of their personal opinions on the creative direction or the direct benefit to their specific location.