If the Hyper Kidz Fund is reinstated, how will it be maintained and operated?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Any reinstated Fund shall be maintained and operated as described in this Section 12.1.
- (c) You must participate in all advertising and public relations programs conducted by the Fund.
The Fund may furnish you with samples of certain marketing, advertising and promotional formats and other such materials without charge.
We will not spend any contributions to the Fund on advertising that is a solicitation of new franchisees.
- (d) All sums paid by franchisees to the Fund, plus income earned from the Fund, shall be maintained in an account separate from our other funds and shall not be used by us for any purposes other than those provided for herein.
Upon your request, we shall, within one hundred twenty (120) days following the close of each fiscal year, prepare and distribute to all franchisees an unaudited statement detailing Fund income and expenses for such fiscal year.
- (e) We may spend, in any fiscal year, an amount greater or less than the aggregate contribution of all Hyper Kidz Businesses to the Fund in that year.
The Fund may borrow from us or other lenders at standard commercial interest rates to cover deficits of the Fund or cause the Fund to invest any surplus for future use by the Fund.
Any monies remaining in the Fund at the end of any fiscal year shall carry over to the next fiscal year.
(f) You authorize us to collect for remission to the Fund any advertising or promotional monies or credits offered by any supplier based upon purchases by you.
(g) We will have the right to cause the Fund to be incorporated or operated through an entity separate from us at such time as we deem appropriate, and such successor entity shall have all our rights and duties pursuant to this Section.
(h) You understand and acknowledge that the Fund is intended to maximize recognition of the Marks and patronage of Hyper Kidz Businesses generally.
Although we will endeavor to utilize the Fund to develop advertising and marketing materials and programs and to place advertising in order to benefit all Hyper Kidz Businesses, we undertake no obligation to ensure that expenditures by the Fund in or affecting any geographic area are proportionate or equivalent to the contributions to the Fund by Hyper Kidz Businesses operating in that geographic area or that any Hyper Kidz Business will benefit directly or in proportion to its contribution from the development of advertising and marketing materials or the placement of advertising.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, if the Hyper Kidz advertising fund is terminated and then reinstated, it will be maintained and operated as described in Section 12.1 of the agreement. Franchisees must participate in all advertising and public relations programs conducted by the fund. The fund may provide franchisees with samples of marketing and promotional materials without charge and will not use contributions to solicit new franchisees.
All sums paid by franchisees to the fund, plus any income earned, will be kept in a separate account and used only for the purposes outlined in the agreement. Upon request, Hyper Kidz will provide franchisees with an unaudited statement detailing the fund's income and expenses within 120 days following the close of each fiscal year. Hyper Kidz may spend more or less than the aggregate contribution of all Hyper Kidz businesses in any given fiscal year. The fund may borrow money or invest surplus funds for future use. Any remaining funds at the end of the fiscal year will carry over to the next fiscal year.
Hyper Kidz is authorized to collect advertising or promotional monies or credits from suppliers based on franchisee purchases for the fund. Hyper Kidz has the right to incorporate the fund or operate it through a separate entity. The fund is intended to maximize recognition of the Hyper Kidz marks and patronage of Hyper Kidz businesses. While Hyper Kidz will endeavor to utilize the fund to benefit all Hyper Kidz businesses, there is no obligation to ensure that expenditures in any geographic area are proportionate to contributions from Hyper Kidz businesses in that area, or that any Hyper Kidz business will benefit directly or in proportion to its contribution.