How is the Successor Agreement Fee for a Hyper Kidz franchise calculated?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
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ARTICLE 17: GRANT OF SUCCESSOR FRANCHISES
17.1 Successor Agreement
If you satisfy each of the requirements set forth below, you may renew for one (1) additional term of ten (10) years.
- 17.1.1 You shall have been, throughout the initial term of this Agreement, in substantial compliance, and at the expiration of such initial term are in full compliance, with this Agreement, your lease or sublease and all other agreements between you and us or companies or persons associated or affiliated with us.
- 17.1.2 You shall, within six (6) months before the expiration of the initial term, but not later than three (3) months before the expiration of the initial term, provide written notice to us that you wish to sign a Successor Agreement, and we, in turn, shall provide you with any documents that you are required to execute for the successor term, which documents may include, but are not limited to, a general release, our Successor Agreement and all other ancillary agreements, instruments and documents then customarily used by us in the granting of Hyper Kidz Franchises and will require payment of the Successor Agreement Fee. (the "Successor Franchise Documents").
- 17.1.3 You shall execute the Successor Franchise Documents and all other documents and instruments that we require in order to renew.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the Successor Agreement Fee is equal to fifty percent (50%) of the then-current initial franchise fee. To renew the franchise agreement for an additional term of ten years, a franchisee must provide written notice within six months, but no later than three months, before the expiration of the initial term, indicating their wish to sign a Successor Agreement.
Along with executing the necessary successor franchise documents, the franchisee must pay the Successor Agreement Fee by the expiration date of the current agreement. Failure to submit both the executed documents and the fee by the expiration date will result in the agreement expiring, and the franchisee will lose further rights under the agreement.
For a prospective Hyper Kidz franchisee, this means planning ahead for the renewal process and understanding the financial commitment involved. They should also be aware that the initial franchise fee may change over time, which would affect the successor agreement fee. It is important to budget accordingly and ensure timely compliance with all requirements to maintain their franchise rights.