Who is responsible for locating and preparing suitable sites for Hyper Kidz businesses under a Multi-Unit Development Agreement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Under the Multi-Unit Development Agreement, we grant you the right to develop and operate the number of Hyper Kidz Businesses in the Development Area that is specified in the minimum performance schedule, which is Attachment 2 to the Multi-Unit Development Agreement. The Development Area is typically described in terms of municipal or county boundaries but may be defined by zip codes or as a specified trade area in a municipality. The actual size of the Development Area will vary depending upon the availability of contiguous markets, our long-range development plans, your financial and operational resources, population and market conditions. Our designation of a particular Development Area is not an assurance or warranty that there are a sufficient number of suitable sites for Hyper Kidz Businesses in the Development Area for you to meet your minimum performance schedule. We will approve sites for future/additional units under a Multi Unit Agreement using our then current site criteria. The responsibility to locate and prepare a sufficient number of suitable sites is solely yours and we have no obligation to approve sites which do not meet our criteria so you can meet the minimum performance schedule.
Source: Item 12 — TERRITORY (FDD pages 33–36)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, under a Multi-Unit Development Agreement, the responsibility for locating and preparing a sufficient number of suitable sites for Hyper Kidz businesses rests solely with the franchisee. Hyper Kidz has no obligation to approve sites that do not meet their criteria, even if it impacts the franchisee's ability to meet the minimum performance schedule outlined in the agreement. Hyper Kidz will use its then current site criteria to approve sites for future/additional units under a Multi Unit Agreement.
This means that a prospective Hyper Kidz franchisee entering into a Multi-Unit Development Agreement bears the entire burden and risk of finding appropriate locations for their franchises. The franchisee cannot rely on Hyper Kidz to assist in site selection beyond providing the brand's criteria. This is a critical consideration, as the franchisee's ability to meet the development schedule depends on securing suitable locations.
Hyper Kidz's designation of a particular Development Area is not a guarantee that there are enough suitable sites within that area to meet the minimum performance schedule. This places significant pressure on the franchisee to conduct thorough market research and site evaluations to ensure the feasibility of meeting the agreed-upon development targets. The franchisee should carefully consider the availability of suitable sites and the potential costs associated with site preparation before entering into a Multi-Unit Development Agreement with Hyper Kidz.