What pre-opening obligations must Hyper Kidz complete before receiving the development fee from franchisees in Virginia?

According to the 2024 Hyper Kidz Franchise Disclosure Document, the Virginia State Corporation Commission's Division of Securities and Retail Franchising mandates that Hyper Kidz must complete its pre-opening obligations before receiving the development fee from franchisees in Virginia. This requirement is put in place to protect the franchisee. The franchisor cannot collect the development fee until it has fulfilled its obligations under the development agreement. This ensures that Hyper Kidz is committed to providing the necessary support and resources to help the franchisee establish their business before receiving payment.

This requirement also ensures that franchisees are not paying for services or support that they have not yet received. It aligns the interests of the franchisor and franchisee, as Hyper Kidz is incentivized to provide timely and effective pre-opening support to facilitate a successful launch. This pre-opening support typically includes site selection assistance, training, marketing guidance, and operational setup.

For a prospective Hyper Kidz franchisee in Virginia, this means they will not be required to pay the development fee until Hyper Kidz has fulfilled its pre-opening obligations as outlined in the development agreement. Franchisees should carefully review the development agreement to understand what these pre-opening obligations entail and ensure that Hyper Kidz has met these requirements before remitting any payment. This provides a level of financial security and ensures that the franchisee receives the promised support before investing further in the franchise.