When transferring a Hyper Kidz franchise, what fees and amounts must be current and paid?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
(b) you and the transferee (if it is then a franchisee of ours) must pay such Royalty Fees, Brand Development Fees, amounts owed for purchases by you (or such transferee) from us and our Affiliates, and all other amounts owed to us or our Affiliates which are then due and unpaid;
(e) you or the transferee must have paid us a transfer fee of Fifteen Thousand Dollars ($15,000) to cover our reasonable costs in effecting the transfer and in providing initial assistance to transferee;
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, before a franchise can be transferred, both the current franchisee and the potential new franchisee must ensure several financial obligations are current. Specifically, all Royalty Fees, Brand Development Fees, and any amounts owed for purchases made from Hyper Kidz or its affiliates must be paid up to date. Additionally, any other outstanding amounts owed to Hyper Kidz or its affiliates must also be settled before the transfer can proceed.
In addition to settling outstanding balances, either the current franchisee or the incoming franchisee is responsible for paying a transfer fee of $15,000 to Hyper Kidz. This fee is intended to cover the costs Hyper Kidz incurs while processing the transfer and providing initial support to the new franchisee. This fee is a standard practice in franchising, as the franchisor needs to vet and train the new franchisee to ensure brand consistency.
Furthermore, the Franchise Disclosure Document states that the current franchisee and their Principals must be in full compliance with the existing Franchise Agreement. This encompasses not only financial obligations but also adherence to all operational and brand standards outlined in the agreement. Ensuring all these conditions are met is crucial for a smooth transfer process and continued success of the Hyper Kidz franchise under new ownership.