What specific documents are required for Hyper Kidz to approve a transfer?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
itted 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.
- 11.5.6 You execute a general release, in a form satisfactory to us, of any and all claims against us, our officers, directors, employees and principal stockholders of any and all claims and causes of action that you may have against us or any subsidiary or affiliated corporations in any way relating to this Agreement or the performance or non-performance thereof by us specifically excluding those representations made by Franchisor in the Franchise Disclosure Document given to the transferee.
- 11.5.7 You pay to us a transfer fee equal to Fifteen Thousand Dollars ($15,000) to cover our reasonable costs in effecting the transfer and in providing initial assistance to transferee.
- 11.6 The grant of rights under this Agreement is personal to Developer, and on the death or permanent disability of Developer, the executor, administrator, conservator, or other personal representative of Developer shall be required to transfer Developer's interest in this Agreement within six (6) months from the date of death or permanent disability to a third party approved by Franchisor. Failure to transfer in accordance with the forgoing will constitute a material default and all that is granted by this Agreement will terminate.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, several documents and actions are required for a transfer to be approved. The transferee must execute Hyper Kidz's standard Multi-Unit Development Agreement, Franchise Agreements for all open or under-construction Hyper Kidz Businesses, and any other ancillary agreements that Hyper Kidz requires of new multi-unit developers at the time of transfer. This ensures the new owner is bound by the same obligations and standards as other developers in the system.
The transferring party (you) must execute a general release in a form satisfactory to Hyper Kidz, which releases Hyper Kidz from any claims, excluding those representations made by Hyper Kidz in the Franchise Disclosure Document given to the transferee. This protects Hyper Kidz from potential legal issues arising from the previous owner's actions or agreements. Additionally, the transferring party 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.
Hyper Kidz also requires a completely executed copy of all transfer documents before the transfer can be effective, and they must provide written consent to the transfer. Furthermore, if Hyper Kidz receives a bona fide written offer to purchase the business, Development Rights, and interests from an unaffiliated third party, Hyper Kidz has the option to purchase these on the same terms and conditions offered by the third party. To determine whether to exercise this option, Hyper Kidz may require certified financial statements and other information about the business and operations. This ensures Hyper Kidz maintains control over who enters the franchise system and protects the brand's integrity.