What warranties and representations is Hyper Kidz entitled to when purchasing the assets of my Hyper Kidz Business?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
Upon termination of this Agreement by us in accordance with its terms and conditions or upon expiration of this Agreement without the grant of a Renewal Franchise, we shall have the option to purchase from you all or a portion of the assets used in the Hyper Kidz Business. We may exercise this option by giving written notice thereof within sixty (60) days from the date of such expiration or termination. Assets shall include, without limitation, leasehold improvements, equipment, furniture, fixtures, signs, inventory and the lease or sublease for the Site. We shall have the unrestricted right to assign this option to purchase. We or our assignee shall be entitled to all customary warranties and representations given by the seller of a business including, without limitation, representations and warranties as to (a) ownership, condition and title to assets; (b) liens and encumbrances relating to the assets; (c) validity of contracts inuring to us or affecting the assets; and (d) contingent or other liabilities.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, if Hyper Kidz terminates the Franchise Agreement or it expires without renewal, Hyper Kidz has the option to purchase the assets of your Hyper Kidz Business. This includes items like leasehold improvements, equipment, furniture, fixtures, signs, inventory, and the lease or sublease for the site. Hyper Kidz can exercise this option within 60 days of termination or expiration by providing written notice.
When Hyper Kidz or its assignee purchases your Hyper Kidz Business assets, they are entitled to customary warranties and representations from you as the seller. These include assurances about the ownership, condition, and title to the assets, confirming that you have the legal right to sell them and that they are in acceptable condition.
Hyper Kidz will also seek warranties regarding any liens or encumbrances on the assets, ensuring there are no outstanding debts or claims against them. They will also want assurances about the validity of any contracts that would transfer to them or affect the assets, and confirmation of the absence of contingent or other liabilities related to the business assets. This protects Hyper Kidz from inheriting unforeseen financial obligations or legal issues related to the assets they are purchasing.