In a transfer of a Hyper Kidz franchise, what agreements must the transferee execute?
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 mul
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, a transferee in a franchise transfer must execute several agreements. Specifically, the transferee must execute Hyper Kidz's standard form of Multi-Unit Development Agreement. They also need to execute Franchise Agreements for all Hyper Kidz Businesses that are currently open or under construction. Finally, the transferee must execute any other ancillary agreements that Hyper Kidz requires of new multi-unit developers at the time of the transfer.
In addition to the transferee's obligations, the transferring party (i.e., the original franchisee) must also take certain actions. The original franchisee must execute a general release, in a form satisfactory to Hyper Kidz. This release covers any and all claims against Hyper Kidz, its officers, directors, employees, and principal stockholders. The release applies to any claims or causes of action the franchisee may have against Hyper Kidz or its affiliates relating to the Franchise Agreement or its performance, but it specifically excludes representations made by Hyper Kidz in the Franchise Disclosure Document given to the transferee.
Furthermore, the original franchisee must pay Hyper Kidz a transfer fee of $15,000. This fee is intended to cover Hyper Kidz's reasonable costs associated with effecting the transfer and providing initial assistance to the transferee. These requirements ensure that Hyper Kidz maintains control over who becomes a franchisee and that the transfer process is adequately compensated.