What options does Hyper Kidz have regarding the terms and conditions the transferee must agree to?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
(d) the transferee and its Principals, at our option, must agree in a manner satisfactory to us to be bound by all terms and conditions of this Agreement for the remainder of its term or execute our then-current form of franchise agreement and such ancillary documents, including guarantees, as are then customarily used by us in the grant of franchises for Hyper Kidz Businesses, modified as necessary to provide for the same Royalty Fees required hereunder and a term equal to the remaining term of this Agreement;
(c) the transferee and its personnel who will have access to the Confidential Information must have signed the Confidentiality and Non-Competition Agreement and have completed our training program to our satisfaction;
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, Hyper Kidz has specific stipulations regarding the terms and conditions that a transferee must agree to when a franchise is transferred. Hyper Kidz, at its option, can require the transferee and its Principals to agree to be bound by all the terms and conditions of the existing Franchise Agreement for the remainder of its term. Alternatively, Hyper Kidz can require the transferee to execute Hyper Kidz's then-current form of franchise agreement and any associated documents, including guarantees.
The new agreement would be modified as necessary to maintain the same Royalty Fees as the original agreement and would have a term equal to the remaining term of the original agreement. This ensures that Hyper Kidz maintains consistent revenue streams and operational standards across all its franchises, even when ownership changes.
These conditions provide Hyper Kidz with flexibility in managing franchise transfers, allowing them to either maintain the existing agreement or update it to the current standards. This protects Hyper Kidz's interests and ensures that the transferee is fully committed to the Hyper Kidz system. The transferee must also sign a Confidentiality and Non-Competition Agreement and complete Hyper Kidz's training program to Hyper Kidz's satisfaction.