Under what circumstances do obligations of the Franchisee or any Principal survive termination or expiration of the Hyper Kidz Franchise Agreement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
ment shall not be deemed a concession by us that the grounds for termination set forth in this Agreement do not constitute "good cause" for termination within the meaning ascribed to that term
by any applicable law or regulation. We shall not be precluded from contesting the validity, enforceability or application of such laws or regulations in any action, hearing or proceeding relating to this Agreement or the termination of this Agreement.
ARTICLE 19: RIGHTS AND OBLIGATIONS UPON TERMINATION OR EXPIRATION
19.1 Payment of Amounts Owed to Us and Our Affiliates
You shall immediately pay to us and our Affiliates upon termination or expiration of this Agreement such Royalty Fees, Brand Development Fees, amounts owed for purchases by you from us or our Affiliates, interest due on any of the foregoing and all other amounts owed to us or our Affiliates which are then unpaid.
19.2 Marks, Copyrights and Trade Dress
- 19.2.1 Upon the termination or expiration of this Agreement, you shall:
- (a) not thereafter, directly or indirectly, at any time or in any manner identify yourself or any business as a current or former Hyper Kidz Business or as a current or former franchisee of ours or otherwise associated with us, or use any Mark, any colorable imitation thereof or any mark substantially identical to or deceptively similar to any Mark in any manner or for any purpose, or utilize for any purpose any trade name, trademark or service mark, domain name, or other commercial symbol or trade dress that suggests or indicates a connection or association with us;
- (b) remove all signs containing any Mark and return to us or destroy forms and materials containing any Mark or otherwise identifying or relating to a Hyper Kidz Business;
- (c) take such action as may be required to cancel or, at our option, to transfer to us or our designee all fictitious or assumed name or equivalent registrations relating to your use of any Mark;
- (d) Assignment of Numbers and Listings. At Franchisor's request, Franchisee shall execute such forms and documents as Franchisor deems necessary to appoint Franchisor its true and lawful attorney-in-fact, with full power and authority, for the sole purpose of assigning to Franchisor, Franchisee's telephone numbers and listings; and provide Franchisor with passwords and administrator rights for all email, software, social media or other such accounts used or created by Franchisee in order to operate the Franchised Business. Upon the expiration or termination of this Agreement, Franchisor may exercise its authority, pursuant to such documents, to obtain any and all of Franchisee's rights to the telephone numbers of the Franchised Business and all related telephone directory listings and other business listings, and all Internet listings, domain names, Internet advertising, websites, listings with search engines, electronic mail addresses, social media, or any other similar listing or usages related to the Franchised Business;
- (e) immediately cease all use of Copyrighted Works which were furnished to you by us pursuant hereto and return to us or destroy all forms, advertising and promotional materials or other materials containing such Copyrighted Works;
- (f) at our option, assign to us or terminate any Website that identifies you as currently or formerly associated with us or that displays any Mark as well as terminate any domain name of such Website, notwithstanding that you are prohibited from establishing your own Website; and
- (g) if we do not purchase all or a portion of the assets of the Hyper Kidz Business as provided in Section 19.6, at your expense make such modifications and alterations, including removal of all distinctive physical and structural features associated with the Trade Dress of Hyper Kidz Businesses, as may be necessary to distinguish the Site of the Hyper Kidz Business so clearly from its former appearance and from other Hyper Kidz Businesses as to prevent any possibility that the public will associate the Site with Hyper Kidz Businesses and any confusion created by such association.
- 19.2.2 You shall furnish to us (a) within thirty (30) days after the effective date of termination or expiration, evidence satisfactory to us of your compliance with Subparagraphs (a) and (c) of the foregoing obligations, and (b) within thirty (30) days after the later of expiration of our option to purchase the Hyper Kidz Business as provided in Section 19.6 or receipt of notice that we elect not to purchase the Hyper Kidz Business pursuant to Section 19.6, evidence satisfactory to us of your compliance with the foregoing obligations.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, several obligations of the franchisee and their principals survive the termination or expiration of the Franchise Agreement. These continuing obligations remain in full effect until they are completely fulfilled or naturally expire.
The franchisee must immediately pay all outstanding Royalty Fees, Brand Development Fees, amounts owed for purchases, and any other debts to Hyper Kidz and its affiliates. The franchisee and their principals are prohibited from identifying themselves as a current or former Hyper Kidz franchisee or using any marks associated with Hyper Kidz. This includes removing all signs and materials bearing Hyper Kidz marks and canceling any registrations related to the use of those marks.
Additionally, the franchisee must cease using any confidential information and return all copies of the Operations Manual and other confidential materials to Hyper Kidz. A covenant not to compete also applies, preventing the franchisee and their principals from having an interest in or working for a competitive business within a 15-mile radius of any Hyper Kidz location for two years after termination or expiration. Hyper Kidz also has the right to purchase the assets of the Hyper Kidz Business upon termination or expiration of the agreement.