Are transfers of Hyper Kidz franchises by gift, devise, or inheritance subject to the same transfer conditions as other transfers?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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. A transfer under this Section 11.6, including without limitation, transfer by devise or inheritance, is subject to the conditions for Transfers in this Article 11 and unless transferred by gift, devise, or inheritance, subject to the terms of Section 11 above. For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from providing continuous and material supervision of the operation of Developer's Hyper Kidz outlet(s) and remaining development schedule during the six (6)-month period from its onset.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, transfers of the Development Agreement by gift, devise, or inheritance are subject to the general transfer conditions outlined in Article 11. Specifically, Section 11.6 states that upon the death or permanent disability of the developer, their interest in the Development Agreement must be transferred within six months to a third party approved by Hyper Kidz. Failure to do so constitutes a material default, leading to termination of the agreement.
This means that if a Hyper Kidz developer passes away or becomes permanently disabled, their designated representative (executor, administrator, etc.) has a limited time frame to transfer the development rights to a Hyper Kidz-approved party. This requirement ensures that the development schedule continues without significant interruption and that the new developer meets Hyper Kidz's standards.
However, the section also notes an exception: transfers by gift, devise, or inheritance are not subject to the terms of Section 11, implying that some conditions may be waived or modified in such cases. This could potentially streamline the transfer process in these specific circumstances, but the core requirement of Hyper Kidz's approval remains. A prospective franchisee should seek clarification from Hyper Kidz regarding which specific conditions are waived for transfers by gift, devise, or inheritance.