Does Hyper Kidz provide any representations about the past financial performance of company-owned or franchised outlets in Item 19?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to the franchisor's management by contacting Chinnababu Gudapati at 6120 Syracuse Court, Clarksville, Maryland, 21029, and gudapatichinna@gmail.com, the Federal Trade Commission, and the appropriate state regulatory agencies.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Hyper Kidz does not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. Hyper Kidz also does not authorize its employees or representatives to make any such representations either orally or in writing.
However, if a prospective franchisee is purchasing an existing Hyper Kidz outlet, Hyper Kidz may provide the actual records of that specific outlet. The FDD stipulates that if a prospective franchisee receives any other financial performance information or projections of future income, they should report it to Hyper Kidz's management, the Federal Trade Commission, and the appropriate state regulatory agencies. This is to ensure that franchisees are not misled by unauthorized financial claims.
This policy is fairly standard in franchising. The FTC permits franchisors to provide information about potential financial performance if there is a reasonable basis for the information and if it is included in the disclosure document. Hyper Kidz has chosen not to provide this information in Item 19, except in the case of a potential sale of an existing outlet. This means that prospective franchisees must conduct their own independent research and due diligence to assess the potential financial viability of a Hyper Kidz franchise.