Is the initial franchise fee for a Hyper Kidz franchise refundable?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
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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.
Source: Item 5 — INITIAL FEES (FDD pages 9–10)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, the initial franchise fee of $42,500 is not refundable under any circumstances. This fee is paid as a lump sum when signing the Franchise Agreement and is uniformly applied to all franchisees. This means that once the agreement is signed, the franchisee cannot get this money back, regardless of whether they proceed with opening the franchise. This non-refundable policy is a standard practice in franchising, as it compensates the franchisor for the initial costs and efforts in granting the franchise.
Similarly, the training fee of $7,500, which covers training for up to three people, is also non-refundable. This fee is due when the franchisee schedules their trainees to attend the initial training program. If additional trainees are sent, there is an extra charge of $1,500 per person. Franchisees are also responsible for covering all expenses incurred by their trainees during the training period, including travel, lodging, meals, and wages.
For those entering into a Multi-Unit Development Agreement with Hyper Kidz, the development fee is also non-refundable. This fee is calculated based on the number of Hyper Kidz Businesses the franchisee commits to developing. For example, developing three Hyper Kidz Businesses would incur a development fee of $85,000, calculated as $42,500 for the first business plus $21,250 for each of the two additional businesses. This fee is payable in a lump sum upon signing the Multi-Unit Development Agreement.