Under what conditions do the continuing obligations of the Hyper Kidz franchise agreement expire after the termination of the agreement?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
All obligations of ours and yours which expressly or by their nature survive or are intended to survive the expiration or termination of this Agreement shall continue in full force and effect subsequent to and notwithstanding its expiration or termination and until they are satisfied in full or by their nature expire.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, all obligations of both the franchisee and Hyper Kidz that are intended to survive the expiration or termination of the Franchise Agreement will remain in effect. These obligations will continue until they are either fully satisfied or naturally expire. This means that certain duties and responsibilities outlined in the agreement don't simply vanish once the franchise term ends; they persist to ensure both parties fulfill their post-termination commitments.
Several specific obligations are detailed in the FDD that survive termination. These include the franchisee's duty to cease using Hyper Kidz's confidential information and to return all copies of the Operations Manual and other confidential materials. Additionally, a covenant not to compete restricts the franchisee and their principals from engaging in any competitive business within a 15-mile radius of the Hyper Kidz Business for a period of two years after termination or ceasing operations.
Furthermore, upon termination or expiration, the franchisee must pay all outstanding Royalty Fees, Brand Development Fees, and any other amounts owed to Hyper Kidz or its affiliates. The franchisee is also obligated to cease using Hyper Kidz's Marks, Copyrights, and Trade Dress, and must take steps to remove any association with Hyper Kidz from their business. Hyper Kidz also has the option to purchase the assets of the Hyper Kidz Business upon termination or expiration of the agreement.
In summary, the continuing obligations under the Hyper Kidz franchise agreement do not automatically expire upon termination. Instead, they remain in effect until fully satisfied or until they naturally expire, as determined by the specific terms of each obligation. Franchisees should carefully review these post-termination obligations to understand their responsibilities and potential restrictions after the franchise agreement ends.