Is the territory granted to a Hyper Kidz franchisee exclusive?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
it E. The Operations Manual includes approximately 96 pages.
Item 12: TERRITORY
Franchise Agreement
Your Franchise Agreement will specify the site that will be the Approved Location for your Hyper Kidz Business. Your Franchise Agreement will also specify a Designated Territory, which will be a minimum of 65,000 kids ages 13 & under within a 15-mile radius (Driving Distance), whichever comes first around the Approved Location. Your Designated Territory may be described in terms of street, municipal or other boundaries, and may be depicted on a map that is attached to your Franchise Agreement. If you do not yet have a location at the signing of the Franchise Agreement, you will receive a non-exclusive site search area list as Attachment 3.
During the term of the Franchise Agreement, we will not establish or operate, nor license any other person to establish or operate, a Hyper Kidz Business in your Designated Territory, except as may be permitted under the Franchise Agreement and those exceptions are described below. Your territorial protection does not depend on your achieving a certain sales volume, market penetration, or other factor, other than compliance with the Franchise Agreement.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
If, during the term of the Franchise Agreement, you wish to relocate your Hyper Kidz Business, or if your Hyper Kidz Business is damaged or destroyed and cannot be repaired within 60 days, you must submit to us in writing the materials we require to consider your request, including information concerning
the proposed new location for your Hyper Kidz Business. You must also meet certain other requirements, such as being in compliance with the Franchise Agreement, the location meets our then-current requirements for a Hyper Kidz Business and is located within your Designated Territory, and you must sign our then-current form of Franchise Agreement. If we permit you to relocate, you will not pay a new initial franchise fee when you sign the new Franchise Agreement. We do not charge a relocation fee.
Except as expressly limited by the Franchise Agreement, we and our affiliates retain all rights with respect to Hyper Kidz Businesses, the Marks, and any products and services anywhere in the world including the right: (a) to produce, offer and sell and to grant others the right to produce, offer and sell the products offered at Hyper Kidz Businesses and any other goods through similar or dissimilar channels of distribution, both within and outside the Designated Territory, under trade and service marks other than the Marks and under any terms and conditions we deem appropriate; (b) to operate and to grant others the right to operate Hyper Kidz Businesses located outside the Designated Territory under any terms and conditions we deem appropriate and regardless of proximity to your Hyper Kidz Business; and (c) the right to acquire and operate a business with one or more indoor recreation facilities located or operating in your Designated Territory, but if we do acquire this business any facilities located or operating within your Designated Territory will not use the Marks.
You may sell our products and services to customers who live anywhere but who choose to use your Franchised Business.
Source: Item 12 — TERRITORY (FDD pages 33–36)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, franchisees do not receive an exclusive territory. The Franchise Agreement specifies a Designated Territory, which is a minimum of 65,000 kids ages 13 & under within a 15-mile radius (Driving Distance) around the Approved Location, whichever comes first.
While Hyper Kidz will not establish or operate, nor license any other person to establish or operate, a Hyper Kidz Business in your Designated Territory during the term of the Franchise Agreement, there are exceptions. A Hyper Kidz franchisee may face competition from other franchisees, from outlets that Hyper Kidz owns, or from other channels of distribution or competitive brands that Hyper Kidz controls.
Hyper Kidz and its affiliates retain all rights with respect to Hyper Kidz Businesses, the Marks, and any products and services anywhere in the world. This includes the right to offer and sell products and services offered at Hyper Kidz Businesses, both within and outside the Designated Territory, under trade and service marks other than the Marks and under any terms and conditions they deem appropriate. They also retain the right to acquire and operate a business with one or more indoor recreation facilities located or operating in your Designated Territory, but if they do acquire this business any facilities located or operating within your Designated Territory will not use the Marks.
Hyper Kidz may offer a franchisee a right of first refusal to purchase a Franchised Business and establish it in a proposed area that is contiguous to their Designated Territory. This is contingent on the franchisee being in full compliance with the Franchise Agreement, having paid all fees owed in full and not having been late during the immediately preceding 12 month period, and if Hyper Kidz believes they are financially capable of constructing and operating another Hyper Kidz Business. The franchisee will have 30 days after receiving the right of first refusal to notify Hyper Kidz whether they will purchase the additional Franchised Business.