What happens after the Minimum Performance Schedule is completed for a Hyper Kidz development agreement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.1 Unless sooner terminated in accordance with the terms of this Agreement, the term of this Agreement and all Development Rights granted hereunder shall expire on the date the last Hyper Kidz Business is opened pursuant to the Minimum Performance Schedule.
- 6.2 Upon completion of the Minimum Performance Schedule, which is when the final Hyper Kidz Business to be developed hereunder has opened for business, if we determine that it is desirable to operate one or more additional Hyper Kidz Businesses in the Development Area, and provided you have timely complied with the Minimum Performance Schedule and are then in compliance with all terms and conditions of all Franchise Agreements, you shall have a right of first refusal to obtain the Development Rights to such additional Hyper Kidz Businesses upon such reasonable terms and conditions as are then determined by us including, but not limited to, the imposition of a new Development Fee and the payment of the then-current initial franchise fee upon execution of the then-current Franchise Agreement. In such case, we shall advise you in writing of the terms and conditions for the acquisition of the Development Rights for such additional Hyper Kidz Businesses. You must notify us in writing within sixty (60) days of the receipt of such notice whether you wish to acquire the Development Rights to all of such additional Hyper Kidz Businesses. If you do not exercise this right of first refusal, in whole, we may, following the expiration of the sixty (60) day period, grant the Development Rights to such additional Hyper Kidz Businesses to any other person or persons on the same terms and conditions or we may elect to develop and construct any of such additional Hyper Kidz Businesses.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the development agreement term concludes when the final Hyper Kidz business outlined in the Minimum Performance Schedule opens. After the schedule is complete, Hyper Kidz may decide to develop more businesses in the area. If the developer has met the schedule and is compliant with all franchise agreements, they have a right of first refusal for these additional locations.
Hyper Kidz will provide written notice of the terms for acquiring development rights for more businesses. The developer then has 60 days to respond in writing if they want to acquire these rights. This may include a new development fee and the then-current initial franchise fee upon execution of the current Franchise Agreement.
If the developer declines this right of first refusal, Hyper Kidz can offer the development rights to others under the same terms or choose to develop the additional Hyper Kidz businesses themselves. This clause ensures that compliant developers get the first opportunity to expand within their area but does not guarantee them additional development rights.