Under what conditions can the Hyper Kidz franchise agreement be amended?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 3.3 You may enter into the initial Franchise Agreement or any subsequent Franchise Agreement as required under this Agreement using a newly formed entity, such as limited liability company, corporation or partnership, for the sole purpose of entering into a Franchise Agreement and operating the Hyper Kidz Business pursuant thereto, provided that you shall also personally sign such Franchise Agreement as a principal. In no event shall you relinquish control over each entity operating each Hyper Kidz Business.
SECTION 4: DEVELOPMENT RIGHTS AND OBLIGATIONS
- 11.5.5 Transferee executes or, in appropriate circumstances, causes all necessary parties to execute, our standard form of Multi-Unit Development Agreement, Franchise Agreements for all Hyper Kidz Businesses open or under construction hereunder, and such other then-current ancillary agreements being required by us of new multi-unit developers on the date of transfer.
- 11.5.6 You execute a general release, in a form satisfactory to us, of any and all claims against us, our officers, directors, employees and principal stockholders of any and all claims and causes of action that you may have against us or any subsidiary or affiliated corporations in any way relating to this Agreement or the performance or non-performance thereof by us specifically excluding those representations made by Franchisor in the Franchise Disclosure Document given to the transferee.
- 11.5.7 You pay to us a transfer fee equal to Fifteen Thousand Dollars ($15,000) to cover our reasonable costs in effecting the transfer and in providing initial assistance to transferee.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
Based on the 2024 Hyper Kidz Franchise Disclosure Document, the franchise agreement is the then-current Hyper Kidz Business Franchise Agreement when exercising each additional Development Right. The agreement for the first Development Right is executed simultaneously with the Multi-Unit Development Agreement. Any subsequent Franchise Agreement that is required under this agreement can be entered into using a newly formed entity, such as a limited liability company, corporation, or partnership, for the sole purpose of entering into a Franchise Agreement and operating the Hyper Kidz Business. However, the franchisee must also personally sign the Franchise Agreement as a principal and cannot relinquish control over each entity operating each Hyper Kidz Business.
Furthermore, in the event of a transfer of the agreement, the transferee must execute Hyper Kidz's standard form of Multi-Unit Development Agreement, Franchise Agreements for all Hyper Kidz Businesses open or under construction, and any other then-current ancillary agreements required by Hyper Kidz of new multi-unit developers on the date of transfer. The transferor must also execute a general release of all claims against Hyper Kidz and pay a transfer fee of $15,000.
In summary, while the Hyper Kidz franchise agreement itself is not explicitly described as being 'amendable,' the FDD outlines conditions under which a new franchise agreement (the then-current version) is executed, such as when exercising development rights or transferring the agreement to a new party. These new agreements effectively supersede or modify the terms of the original agreement.