Under what condition does the Hyper Kidz agreement and all development rights expire?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 6.1 Unless sooner terminated in accordance with the terms of this Agreement, the term of this Agreement and all Development Rights granted hereunder shall expire on the date the last Hyper Kidz Business is opened pursuant to the Minimum Performance Schedule.
- 6.2 Upon completion of the Minimum Performance Schedule, which is when the final Hyper Kidz Business to be developed hereunder has opened for business, if we determine that it is desirable to operate one or more additional Hyper Kidz Businesses in the Development Area, and provided you have timely complied with the Minimum Performance Schedule and are then in compliance with all terms and conditions of all Franchise Agreements, you shall have a right of first refusal to obtain the Development Rights to such additional Hyper Kidz Businesses upon such reasonable terms and conditions as are then determined by us including, but not limited to, the imposition of a new Development Fee and the payment of the then-current initial franchise fee upon execution of the then-current Franchise Agreement. In such case, we shall advise you in writing of the terms and conditions for the acquisition of the Development Rights for such additional Hyper Kidz Businesses. You must notify us in writing within sixty (60) days of the receipt of such notice whether you wish to acquire the Development Rights to all of such additional Hyper Kidz Businesses. If you do not exercise this right of first refusal, in whole, we may, following the expiration of the sixty (60) day period, grant the Development Rights to such additional Hyper Kidz Businesses to any other person or persons on the same terms and conditions or we may elect to develop and construct any of such additional Hyper Kidz Businesses.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, the Multi-Unit Development Agreement, including all development rights, will expire when the last Hyper Kidz business is opened according to the Minimum Performance Schedule, unless the agreement is terminated sooner based on other terms. This means that a developer's rights to open new Hyper Kidz locations in their designated area ends once they have fulfilled their agreed-upon development schedule.
However, Hyper Kidz offers a right of first refusal. Upon completion of the Minimum Performance Schedule, Hyper Kidz may determine that it is desirable to operate one or more additional Hyper Kidz Businesses in the Development Area. If the developer has timely complied with the Minimum Performance Schedule and are then in compliance with all terms and conditions of all Franchise Agreements, the developer shall have a right of first refusal to obtain the Development Rights to such additional Hyper Kidz Businesses upon such reasonable terms and conditions as are then determined by Hyper Kidz including, but not limited to, the imposition of a new Development Fee and the payment of the then-current initial franchise fee upon execution of the then-current Franchise Agreement.
It is important for potential Hyper Kidz developers to understand the Minimum Performance Schedule outlined in their agreement. Meeting this schedule is crucial not only for maintaining their development rights but also for potentially securing the opportunity to expand further within their area. The expiration of the agreement does not affect the operation of existing Hyper Kidz businesses under their respective Franchise Agreements.