What happens if a Hyper Kidz franchisee violates the covenants outlined in Section 12?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.6 You acknowledge that any failure to comply with the requirements of this Section 12 would cause us irreparable injury for which no adequate remedy at law may be available, and you hereby accordingly consent to our seeking injunctive relief prohibiting any conduct by you in violation of the terms of this Section 12. We may further avail ourselves of any other legal or equitable rights and remedies which we may have under this Agreement or otherwise.
- 12.7 During the term of this Agreement, an officer or agent of ours shall have the right to inspect any Hyper Kidz Business in which you have an interest at reasonable times and during normal business hours to the extent reasonably necessary to determine whether the conditions of this Section 12 are being satisfied. If, by reason of such inspections or otherwise, we have reason to believe that you are not in full compliance with the terms of this Section, we shall give notice of such default to you, specifying the nature of such default. If you deny that you are in default hereunder, as specified by us, you shall have the burden of establishing that such default does not exist and shall give notice to us of your position within ten (10) days of receipt of the notice from us. Unless you so deny such default, you shall immediately take all steps to cure said default in a manner satisfactory to us.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, if a franchisee fails to comply with the requirements outlined in Section 12, Hyper Kidz may pursue legal remedies. Specifically, Hyper Kidz can seek injunctive relief, which is a court order prohibiting the franchisee from continuing the violating conduct. This is because Hyper Kidz considers a failure to comply with Section 12 as causing irreparable injury for which monetary compensation may not be adequate.
In addition to injunctive relief, Hyper Kidz reserves the right to use any other legal or equitable remedies available under the Franchise Agreement or otherwise. This means Hyper Kidz could potentially pursue monetary damages, specific performance, or other remedies to address the franchisee's non-compliance.
Hyper Kidz also has the right to inspect any Hyper Kidz Business in which the franchisee has an interest at reasonable times and during normal business hours to determine whether the conditions of Section 12 are being satisfied. If Hyper Kidz believes the franchisee is not in full compliance, they will provide notice of the default, specifying the nature of the default. The franchisee then has the burden of proving that the default does not exist or must take steps to cure the default to Hyper Kidz's satisfaction.