Can Hyper Kidz reduce the scope of the non-compete covenants?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.4 You understand and acknowledge that we shall have the right, in our sole discretion, to reduce the scope of any covenant stated in Sections 12.1 and 12.2 or any portion thereof, without your consent, effective immediately upon receipt by you of written notice thereof, and you agree that you shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 16 hereof.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Hyper Kidz has the right to reduce the scope of the non-compete covenants detailed in Sections 12.1 and 12.2 of the agreement. This reduction can be made without the franchisee's consent and becomes effective immediately upon the franchisee receiving written notice from Hyper Kidz.
This provision grants Hyper Kidz significant flexibility in adjusting the non-compete terms. As a prospective franchisee, it is crucial to understand that the initial non-compete terms outlined in the franchise agreement could be altered by Hyper Kidz at any time during the agreement. The franchisee is obligated to comply with these modified terms immediately upon notification.
This clause also states that the franchisee must comply with the modified covenant, even if Section 16 of the agreement states otherwise. Section 16 likely contains provisions about amendments or modifications to the agreement, but this clause overrides those general provisions, giving Hyper Kidz the explicit right to change the non-compete terms unilaterally. Franchisees should seek legal counsel to fully understand the implications of this clause and how it might affect their future business activities should they leave the Hyper Kidz system.