How often is the Hyper Kidz Brand Development Fee payable?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
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Notwithstanding any designation by you, we shall have sole discretion to apply any payments received from you or any indebtedness of yours to us or our Affiliates to any past due indebtedness of yours for Royalty Fees, Brand Development Fees, Technology Fees, purchases from us or our Affiliates, interest, or any other indebtedness of yours to us.
10.7 Electronic Funds Transfer
10.7.1 At our request, you must sign and deliver to us any documents we require, which may include the Electronic Funds Transfer Authorization attached hereto as Attachment 5, to authorize us to debit your operating account automatically for the Royalty Fee, Brand Development Fee, Technology Fee, and other amounts due under this Agreement. You agree to make the funds available for withdrawal by electronic transfer before each due date.
10.7.2 If you fail to provide the Royalty Report as required by Section 10.2, we may debit your account for one hundred twenty percent (120%) of the last Royalty Fee and Brand Development Fee that we debited. If the Royalty Fee and Brand Development Fee debited from your account are less than the Royalty Fee and Brand Development Fee you actually owe to us (once we have determined the Hyper Kidz Business's true and correct Gross Sales), we will debit your account for the balance of the Royalty Fee and Brand Development Fee due on the day we specify. If the Royalty Fee and Brand Development Fee debited from your account are greater than the Royalty Fee and Brand Development Fee actually owed, we will credit the excess against the amount we otherwise would debit from your account for the next payment due.
10.8 Payment to Vendors
We shall have the right under this Agreement to debit your bank account for and pay any vendor account of yours that is at least sixty (60) days old.
10.9 Insufficient Funds Fee
If there are not sufficient funds in your account to permit us to debit the account for the payments you owe us, you will pay to us an insufficient funds fee equal to One Hundred Twenty-Five Dollars ($125). This fee is in addition to late fees and interest on any overdue amount, as described in Section 10.5 above, and any fees charged by your bank.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, the Brand Development Fee is linked to royalty fees and is subject to electronic funds transfer. While the document mentions the Brand Development Fee in several contexts, it does not explicitly state the payment frequency.
However, Section 10.7.1 indicates that franchisees may be required to authorize Hyper Kidz to automatically debit their account for the Brand Development Fee, along with Royalty Fees, Technology Fees, and other amounts due. Section 10.7.2 also mentions that if a franchisee fails to provide the Royalty Report as required, Hyper Kidz may debit the franchisee's account for 120% of the last Royalty Fee and Brand Development Fee debited. Section 10.5.1 states that all Royalty Fees and Brand Development Fees, among other amounts, bear interest if not paid when due.
Because the FDD does not specify a payment schedule for the Brand Development Fee, prospective franchisees should seek clarification from Hyper Kidz regarding the exact payment terms, including how often the fee is payable and the specific due dates. Understanding the payment schedule is crucial for managing cash flow and avoiding late payment penalties or potential default on the franchise agreement.