What requirements must a transferee meet to be approved as a new Hyper Kidz multi-unit developer?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
ent, including all of the requirements of this Section with respect to the proposed transfer.
- 11.4 You acknowledge and agree that the restrictions on transfer imposed herein are reasonable and are necessary to protect the Development Rights, the System and the Marks, as well as our reputation and image, and are for the protection of us, you and other multi-unit developers and franchisees. Any assignment or transfer permitted by this Section 11 shall not be effective until we receive a completely executed copy of all transfer documents, and we consent in writing thereto.
- 11.5 Except as provided in Section 11.2 hereof, we agree not to unreasonably withhold our consent to a sale, assignment or transfer by you hereunder. Consent to such transfer otherwise permitted or permissible as reasonable may be refused unless:
- 11.5.1 All of your obligations created by this Agreement, all other franchise documents, including all Franchise Agreements, and the relationship created hereunder are assumed by the transferee.
- 11.5.2 All ascertained or liquidated debts of you to us or our affiliated or subsidiary corporations are paid.
- 11.5.3 You are not in default hereunder.
- 11.5.4 We are reasonably satisfied that the transferee meets all of our requirements for new multi-unit developers, including but not limited to, good reputation and character, business acumen, operational ability, management skills, financial strength and other business considerations.
- 11.5.5 Transferee executes or, in appropriate circumstances, causes all necessary parties to execute, our standard form of Multi-Unit Development Agreement, Franchise Agreements for all Hyper Kidz Businesses open or under construction hereunder, and such other then-current ancillary agreements being required by us of new multi-unit developers on the date of transfer.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, a transferee seeking approval as a new multi-unit developer must meet several conditions. The transferee must assume all obligations under the existing Multi-Unit Development Agreement, Franchise Agreements, and any related documents. This ensures the new developer is fully responsible for the commitments made in the original agreements. All outstanding debts owed by the transferor to Hyper Kidz or its affiliates must be settled.
Additionally, the transferor must not be in default of the agreement. Hyper Kidz must be reasonably satisfied that the transferee meets all the requirements for new multi-unit developers. These requirements include, but are not limited to, a good reputation and character, business acumen, operational ability, management skills, financial strength, and other business considerations. This comprehensive evaluation ensures that the transferee has the necessary qualifications to successfully manage and expand the Hyper Kidz brand.
The transferee is also required to execute Hyper Kidz's standard form of Multi-Unit Development Agreement, Franchise Agreements for all existing or under-construction Hyper Kidz businesses, and any other ancillary agreements required of new multi-unit developers at the time of transfer. The transferor must execute a general release of claims against Hyper Kidz, its officers, directors, employees, and principal stockholders, excluding representations made by Hyper Kidz in the Franchise Disclosure Document provided to the transferee. Finally, the transferor must pay a transfer fee of $15,000 to cover Hyper Kidz's costs associated with the transfer and providing initial assistance to the transferee.