What rights are included in the purchase of the Hyper Kidz business, Development Rights and interests?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.3 Except as provided in Section 11.2, if you receive from an unaffiliated third party and desires to accept a bona fide written offer to purchase your business, Development Rights and interests, we shall have the option, exercisable within thirty (30) days after receipt of written notice setting forth the name and address of the prospective purchaser, the price and terms of such offer, and a copy of such offer and the other information stated in this Section 11.3, to purchase such business, Development Rights and interests, including your right to develop sites within the Development Area, on the same terms and conditions as offered by said third party.
In order that we may have information sufficient to enable us to determine whether to exercise this option, we may require you to deliver to us certified financial statements as of the end of your most recent fiscal year and such other information about your business and operations as we may request.
If we decline, or do not accept the offer in writing within thirty (30) days, you may, within thirty (30) days from the expiration of the option period, sell, assign and transfer your business, Development Rights and interest to said third party, provided we have consented to such transfer as required by this Section 11.
Any material change in the terms of the offer prior to closing of the sale to such third party shall constitute a new offer, subject to the same rights of first refusal by us or our nominee, as in the case of an initial offer.
Our failure to exercise the option afforded by this Section 11.3 shall not constitute a waiver of any other provision of this Agreement, 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.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, if a franchisee receives a legitimate offer from an unaffiliated third party to purchase their Hyper Kidz business, Development Rights, and interests, Hyper Kidz has the option to purchase these rights themselves. This option is exercisable within 30 days of receiving written notice of the offer, which must include the prospective purchaser's information, the offer's price and terms, and a copy of the offer. Hyper Kidz may request certified financial statements and other business information to evaluate the offer.
If Hyper Kidz declines the offer or does not accept it in writing within 30 days, the franchisee has 30 days from the expiration of the option period to sell, assign, and transfer their business, Development Rights, and interests to the third party, provided Hyper Kidz consents to the transfer. Any material change in the terms of the offer constitutes a new offer, subject to Hyper Kidz's right of first refusal. Hyper Kidz's failure to exercise its option does not waive any other provisions of the agreement regarding the proposed transfer.
The FDD states that the restrictions on transfer are reasonable and necessary to protect the Development Rights, the Hyper Kidz system and marks, and Hyper Kidz's reputation and image, for the protection of Hyper Kidz, the franchisee, and other multi-unit developers and franchisees. Any assignment or transfer is not effective until Hyper Kidz receives a fully executed copy of all transfer documents and provides written consent. This ensures Hyper Kidz maintains control over who enters the system and that transfers align with their strategic interests.