Under what condition can Hyper Kidz establish or franchise another party to establish a Hyper Kidz Business in the Development Area during the term of the Development Agreement?

According to Hyper Kidz's 2024 Franchise Disclosure Document, Hyper Kidz will not establish or franchise anyone other than the franchisee to establish a Hyper Kidz Business in the Development Area during the term of the Development Agreement, as long as the franchisee is not in default of the agreement. However, this is subject to other provisions within the agreement.

Hyper Kidz retains specific rights, including the ability to offer and sell products and services under different trademarks outside the Development Area. They can also operate or franchise Hyper Kidz Businesses outside the Development Area, regardless of their proximity to the franchisee's locations. Additionally, Hyper Kidz can acquire and operate similar businesses within the Development Area, provided they do not use Hyper Kidz's proprietary marks.

Upon termination or expiration of the Development Agreement, Hyper Kidz and its affiliates have the right to develop, operate, and grant franchises to others within the Development Area. This is subject to the territorial rights granted to the franchisee for the businesses they operate under the Franchise Agreements and the right of first refusal described in Section 6 of the agreement.