What happens if the terms of the offer to purchase the Hyper Kidz business change before closing?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Except as provided in Section 11.2, if you receive from an unaffiliated third party and desires to accept a bona fide written offer to purchase your business, Development Rights and interests, we shall have the option, exercisable within thirty (30) days after receipt of written notice setting forth the name and address of the prospective purchaser, the price and terms of such offer, and a copy of such offer and the other information stated in this Section 11.3, to purchase such business, Development Rights and interests, including your right to develop sites within the Development Area, on the same terms and conditions as offered by said third party.
In order that we may have information sufficient to enable us to determine whether to exercise this option, we may require you to deliver to us certified financial statements as of the end of your most recent fiscal year and such other information about your business and operations as we may request.
If we decline, or do not accept the offer in writing within thirty (30) days, you may, within thirty (30) days from the expiration of the option period, sell, assign and transfer your business, Development Rights and interest to said third party, provided we have consented to such transfer as required by this Section 11.
Any material change in the terms of the offer prior to closing of the sale to such third party shall constitute a new offer, subject to the same rights of first refusal by us or our nominee, as in the case of an initial offer.
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 receives a legitimate offer from a third party to purchase their Hyper Kidz business, development rights, and interests, Hyper Kidz has the first option to purchase the business on the same terms. To exercise this option, Hyper Kidz must receive written notice of the offer, including the prospective purchaser's information, the offer's price and terms, and a copy of the offer. Hyper Kidz can request certified financial statements and other business information to evaluate the offer.
If Hyper Kidz declines the offer or does not accept it in writing within 30 days, the franchisee has 30 days to sell to the third party, provided Hyper Kidz has consented to the transfer.
However, if the terms of the offer materially change before the sale closes, it is considered a new offer. This new offer is subject to the same right of first refusal by Hyper Kidz. This ensures Hyper Kidz retains control over who enters their franchise system and on what terms, even if the initial offer changes.