Under what circumstances can a Hyper Kidz franchisee obtain items from any supplier?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
sly approved as meeting our standards and specifications. There might be situations where you can obtain items from any supplier who can satisfy our requirements and, therefore, would be an approved supplier.
Currently neither we nor our Affiliate are an approved supplier for any product or service you must purchase or lease. None of our officers has an ownership interest in any approved supplier.
Our designated accountant is the sole approved supplier of accounting services for the first two years of operation of your Franchised Business. We also may designate the suppliers you must use for your music subscription service, background checks on your employees, and the required video surveillance. You must also make sure that we have access to your video surveillance feed and/or records. A list of our approved suppliers will be included in the Manual and is subject to change over time. We will provide you notice in the Manual or otherwise in writing (such as via email) of any changes to the list of approved suppliers.
You must select a site that you propose to use for your Franchised Business and you must submit to us all information we require to evaluate the site you propose. You may not obtain the site (by lease, sublease or purchase agreement) until the site has been approved by us. We have the right to review any lease, sublease or purchase agreement for the approved site before you sign it. At our request, you and your landlord must sign our form of Collateral Assignment of Lease, attached to the Franchise Agreement as Attachment 6.
You must arrange for blueprints and/or construction plans to be prepared for the build-out of your Franchised Business. We have the right to designate the architect or design firm that you must use. We will provide you with our requirements for the layout of your Franchised Business. Any blueprints or construction plans must be submitted to us for our approval before you may begin construction. Our review is only meant to verify compliance with our standards and presentation of the Proprietary Marks. You must make sure that the plans are in compliance with all applicable laws, ordinances and building codes, including the Americans with Disabilities Act. We may inspect your Franchised Business during its construction and you may not open your Franchised Business until we have approved it for opening.
Any advertising materials that you have had prepared for you, or that we have not approved within the most recent 12-month period, and that you wish to use to promote your Hyper Kidz Business must be submitted to us for our approval before the materials may be used. You may not use any advertising materials that we have not approved.
If you wish to purchase, lease or use any products or other items, or purchase from an unapproved supplier, you must submit a written request for approval, or must request the supplier to do so. We must approve any product or supplier in writing before you make any purchases of that product or from that supplier. We can require that our representatives be permitted to inspect the supplier's facilities and that samples from the supplier be delivered either to us or to an independent laboratory for testing. We have
the right to re-inspect the facilities and products of any approved supplier and to revoke our approval if the supplier fails to continue to meet any of our then-current standards. You or the supplier must reimburse our costs for our evaluation of the proposed product or supplier (up to $500). Our supplier approval procedure does not obligate us to approve any particular supplier.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 19–22)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, a franchisee may be able to obtain items from any supplier if that supplier can satisfy Hyper Kidz's requirements and become an approved supplier. To ensure quality and service standards, franchisees must operate their Hyper Kidz Business in strict compliance with the methods, standards, and specifications outlined in the Confidential Operations Manual or in writing. Franchisees must not deviate from these standards without prior written consent from Hyper Kidz, and Hyper Kidz may revise the contents of the Manual, requiring franchisees to comply with each new or changed standard. Franchisees must maintain a sufficient supply of products and supplies purchased from designated or approved suppliers, and any other materials, paper goods, fixtures, furnishings, equipment, signs, and other items must conform to Hyper Kidz's standards and specifications.
If a franchisee wishes to purchase, lease, or use any products or purchase from an unapproved supplier, they must submit a written request for approval. Hyper Kidz must approve any product or supplier in writing before purchases are made. Hyper Kidz can require inspections of the supplier's facilities and samples for testing, with the franchisee or supplier reimbursing Hyper Kidz's evaluation costs, up to $500. Hyper Kidz retains the right to re-inspect approved suppliers and revoke approval if standards are not maintained.
Hyper Kidz estimates that purchases from approved suppliers or those conforming to their specifications will constitute approximately 80% to 85% of the franchisee's total purchases when establishing the Hyper Kidz Business, and approximately 50% to 60% of total purchases during continuing operations. Hyper Kidz may also establish strategic alliances or preferred vendor programs, potentially limiting the number of approved suppliers or designating specific sources that franchisees must use. Hyper Kidz may refuse to approve new suppliers if it believes doing so would not be in the best interests of the System.