What happens if execution is levied against a Hyper Kidz franchisee's business or property?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 9.1.8 If any of your principals shall become insolvent or make a general assignment for the benefit of creditors; if a petition in bankruptcy is filed by you or such a petition is filed against and not opposed by you; if you are adjudicated a bankrupt or insolvent; if a bill in equity or other proceeding for the appointment of a receiver or other custodian for you or your business or assets is filed and consented to by you; if a receiver or other custodian (permanent or temporary) of your assets or property, or any part thereof, is appointed by any court of competent jurisdiction; if proceedings for a composition with creditors under any state or federal law should be instituted by or against you; if a final judgment remains unsatisfied or of record for thirty (30) days or longer (unless a supersedeas bond is filed); if execution is levied against your business or property; if suit to foreclose any lien or mortgage against the premises or equipment is instituted against you and not dismissed within thirty (30) days; or if the real or personal property of the business shall be sold after levy thereupon by any sheriff, marshal, or constable.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, if execution is levied against a franchisee's business or property, it can lead to the termination of the Franchise Agreement. Specifically, under Section 9.1.8, if execution is levied against the franchisee's business or property, this constitutes grounds for termination.
Hyper Kidz retains the right to terminate the agreement if such an event occurs. The termination becomes effective 30 days after written notice is given to the franchisee, provided the default is not cured within that period. This means a franchisee has a short window to resolve the issue (e.g., settling the debt that led to the levy) to avoid losing their franchise.
This clause protects Hyper Kidz by ensuring franchisees maintain financial stability and uphold the brand's reputation. For a prospective franchisee, it highlights the importance of managing finances carefully and addressing any legal or financial issues promptly to avoid the risk of losing their franchise. It's also important to understand what constitutes a 'cure' in this context and whether Hyper Kidz has any discretion in accepting a cure.