Does Hyper Kidz have an obligation to approve sites that do not meet their criteria?

According to Hyper Kidz's 2024 Franchise Disclosure Document, Hyper Kidz is not obligated to approve sites for multi-unit developers that do not meet their criteria. Specifically, this applies to franchisees operating under a Multi-Unit Development Agreement.

The FDD states that Hyper Kidz will use its then-current site criteria when approving locations for future or additional units under a Multi-Unit Agreement. The responsibility of finding and preparing enough suitable sites lies solely with the franchisee. Hyper Kidz explicitly states it has no obligation to approve sites that do not meet their criteria, even if the franchisee needs those sites to meet the minimum performance schedule outlined in Attachment 2 of the Multi-Unit Development Agreement.

This stipulation carries significant implications for multi-unit developers. It underscores the importance of thorough due diligence and market research before entering into a Multi-Unit Development Agreement with Hyper Kidz. Franchisees must be confident in their ability to identify and secure locations that align with Hyper Kidz's criteria to fulfill their development obligations. Failing to secure appropriate sites could lead to a failure to meet the minimum performance schedule, potentially resulting in a loss of territorial exclusivity or even termination of the Multi-Unit Development Agreement.