Can Hyper Kidz unilaterally reduce the scope of the non-compete covenants?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.4 You understand and acknowledge that we shall have the right, in our sole discretion, to reduce the scope of any covenant stated in Sections 12.1 and 12.2 or any portion thereof, without your consent, effective immediately upon receipt by you of written notice thereof, and you agree that you shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions of Section 16 hereof.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, Hyper Kidz has the right to reduce the scope of the non-compete covenants without the franchisee's consent. Specifically, Hyper Kidz can modify the covenants outlined in Sections 12.1 and 12.2 of the agreement.
This modification becomes effective immediately upon the franchisee receiving written notice from Hyper Kidz. The franchisee is then obligated to comply with the modified covenant. This change is enforceable regardless of Section 16 of the agreement, which typically addresses amendments.
This clause provides Hyper Kidz with considerable flexibility to adjust the non-compete terms as they see fit, potentially allowing them to narrow the restrictions on a franchisee's activities post-termination or during the agreement term. Franchisees should be aware that the non-compete terms they initially agree to may be altered by Hyper Kidz during the course of the franchise agreement.