What is the initial franchise fee for a Hyper Kidz franchise?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 5: INITIAL FEES]
Item 5: INITIAL FEES
Franchise Agreement
Initial Franchise Fee: You must pay us an initial franchise fee of $42,500, which is due in a lump sum when you sign the Franchise Agreement. The initial franchise fee is imposed uniformly on all franchisees and is not refundable under any circumstances.
Training Fee: You must pay us a training fee equal to $7,500 when you schedule your trainees to attend our initial training program. We will train up to three people for the training fee. If you wish to send additional trainees to our initial training program, you must pay an additional training fee of $1,500 per person. You must also pay all expenses your trainees incur while attending training, including travel, lodging, meals and applicable wages. The training fee is not refundable.
Multi-Unit Development Agreement
Development Fee: If you sign a Multi-Unit Development Agreement, you must pay us a development fee. The development fee is payable to us in a lump sum when you sign the Multi-Unit Development Agreement and is not refundable under any circumstances.
The development fee is calculated as 100% of the initial franchise fee for the first Hyper Kidz Business to be developed ($42,500), plus 50% of the initial franchise fee ($21,250) for each additional Hyper Kidz Business to be developed in the Development Area. For example, if you commit to develop
three Hyper Kidz Businesses in the Development Area, the development fee is calculated as $42,500 + (2 x $21,250 = $42,500) = $85,000.
We expect that you will sign the Franchise Agreement for your first Hyper Kidz Business at the same time you sign the Multi-Unit Development Agreement, and a portion of the development fee will be used to pay the initial franchise fee for this Hyper Kidz Business in full. For each Hyper Kidz Business developed after the first one, a pro rata portion of the development fee is applied toward the initial franchise fee due for that Hyper Kidz Business, and the balance of the initial franchise fee ($19,750) is payable in a lump sum when you sign the Franchise Agreement for that Hyper Kidz Business.
Illinois residents only: The Illinois Attorney General's Office imposed a Surety Bond requirement equal to the initial fee times the number of franchises to be sold due to Franchisor's financial condition.
Source: Item 5 — INITIAL FEES (FDD pages 9–10)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the initial franchise fee is $42,500. This fee is due in a lump sum when the Franchise Agreement is signed and is applied uniformly to all franchisees. The initial franchise fee is non-refundable under any circumstances.
For franchisees who sign a Multi-Unit Development Agreement, the initial franchise fee is factored into the development fee. The development fee covers the initial franchise fee for the first Hyper Kidz Business, plus 50% of the initial franchise fee for each additional location to be developed. A portion of the development fee will be used to pay the initial franchise fee for the first Hyper Kidz Business. For each additional Hyper Kidz Business, a pro rata portion of the development fee is applied toward the initial franchise fee, with the balance of $19,750 payable upon signing the Franchise Agreement for that business.
It is important to note that Illinois residents may be subject to a Surety Bond requirement imposed by the Illinois Attorney General's Office, which is equal to the initial fee times the number of franchises to be sold, due to Hyper Kidz's financial condition. This could add a significant upfront cost for franchisees in Illinois. Prospective franchisees should carefully consider this additional requirement and discuss it with Hyper Kidz to fully understand the implications.