Under what circumstances is the Hyper Kidz franchise agreement automatically amended regarding termination rights?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Even though we decline the renewal of your Franchise, it is possible that we can be required to renew it under a law, rule, regulation, statute, ordinance, or legal order that is applicable at the time. If that happens, to the extent it is allowed by the applicable law, rule, regulation, statute, ordinance or order, your successor term will be subject to the conditions of the Franchise Agreement we are using for new franchisees at the time the successor period begins. If we are not then offering new franchises, your successor period will be subject to the terms in the then-current Franchise Agreement that we indicate. If for any reason that is not allowed, the renewal term will be governed by the terms of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, the franchise agreement may be subject to changes under specific legal circumstances related to renewal.
If Hyper Kidz declines to renew a franchise agreement, but a law, rule, regulation, statute, ordinance, or legal order requires them to renew it, the terms of the renewal are subject to certain conditions. To the extent allowed by the applicable law, rule, regulation, statute, ordinance or order, the successor term will be subject to the conditions of the Franchise Agreement Hyper Kidz is using for new franchisees at the time the successor period begins. If Hyper Kidz is not offering new franchises at that time, the successor period will be subject to the terms in the then-current Franchise Agreement that Hyper Kidz indicates. If that is not allowed for any reason, the renewal term will be governed by the terms of the original agreement.
This means that if a law mandates renewal despite Hyper Kidz's refusal, the terms of the renewed franchise could be based on the current franchise agreement for new franchisees or, if no new franchises are being offered, on the terms of the current agreement Hyper Kidz specifies. However, if these options are not legally permissible, the renewal term will default to the terms of the original franchise agreement. This clause ensures Hyper Kidz complies with applicable laws while also attempting to align renewal terms with their current franchise offerings.