Is a Hyper Kidz marketing cooperative required to prepare a financial statement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.3.7 each member/franchisee must submit its contribution under Section 12.3.6 to the Cooperative, together with such statements or reports as we or the Cooperative may require, with our prior written approval;
- 12.3.9 the Cooperative is not required to prepare a financial statement.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, a marketing cooperative is not required to prepare a financial statement. However, individual franchisees may be required to submit statements or reports to the cooperative, as required by Hyper Kidz or the cooperative itself, with Hyper Kidz's prior written approval.
Hyper Kidz may create local or regional marketing cooperatives and establish the rules for them, or approve cooperatives formed by franchisees. Franchisees must become members of the cooperative in their area upon request. These cooperatives are funded by periodic contributions from their members. These funds are credited against the franchisee's local marketing obligations.
These cooperatives must be organized and governed in a manner approved by Hyper Kidz, with the exclusive purpose of administering marketing programs and developing standardized promotional materials. While cooperatives can adopt their own rules and procedures, these must also be approved by Hyper Kidz and cannot conflict with the franchise agreement. Any action taken by the cooperative with the approval of members holding more than 50% of the voting power is binding, with each Hyper Kidz business having one vote, although no franchisee can hold more than 25% of the vote.