What activities are considered 'Prohibited Activities' under the Kidokinetics System Protection Agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- "Prohibited Activities" means any or all of the following: (i) owning, operating, or having any other interest (as an owner, partner, director, officer, employee, manager, consultant, shareholder, creditor, representative, agent, or in any similar capacity) in a Competitive Business (other than owning an interest of five percent (5%) or less in a publicly-traded company that is a Competitive Business); (ii) diverting or attempting to divert any business from us (or one of our affiliates or franchisees); and/or (iii) inducing or attempting to induce any customer of ours (or of one of our affiliates or franchisees) to transfer their business to you or to any other person that is not then a franchisee of ours.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, 'Prohibited Activities' are explicitly defined within the context of the Confidentiality Agreement and covenants not to compete. These activities are restricted to protect Kidokinetics's business model, trade secrets, and customer relationships.
Specifically, 'Prohibited Activities' include: (i) owning, operating, or having any interest in a Competitive Business, whether as an owner, partner, director, officer, employee, or in any similar capacity. An exception exists for owning an interest of five percent (5%) or less in a publicly-traded company that is a Competitive Business; (ii) diverting or attempting to divert any business from Kidokinetics, its affiliates, or franchisees; and (iii) inducing or attempting to induce any customer of Kidokinetics, its affiliates, or franchisees to transfer their business to another person or entity that is not a Kidokinetics franchisee.
These restrictions apply both during the franchisee's association with Kidokinetics and for a specified period after termination. Engaging in these activities can lead to legal repercussions and extensions of the restricted period. The definition aims to prevent unfair competition and protect the Kidokinetics system from individuals who might use confidential information or relationships gained during their time with the franchise to unfairly benefit a competing business.