What activities are Kidokinetics franchisees allowed to engage in that are not expressly prohibited under the agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor.
- 2.2. Reservation of Rights. Franchisee acknowledges and agrees that Franchisor and any parties Franchisor designates will have the right to: (i) establish and operate, and license third parties the right to establish and operate, other franchised businesses using the Marks and System at any location outside of the Territory; (ii) acquire, merge with, engage in joint ventures with, or otherwise affiliate with, and thereafter own and operate and franchise others the right to own and operate, any business of any kind, including businesses that offer products that are similar to those provided by a Franchised Business, within or outside the Territory; (iii) open and operate, or license third parties the right to open or operate, businesses that offer products and services similar to the Franchised Business under marks other than the Marks at any location; (iv) sell and distribute, directly or indirectly, or license others to sell and distribute, directly or indirectly, any products, services or merchandise, from any location or to any purchaser, through any channel or method of distribution (including, but not limited, to virtual classes, sales made by or through telemarketing, and/or on the Internet); (v) provide the services or sell products authorized for Kidokinetics Businesses to customers whose principal residence (or principal business office, if the customer is a business entity) is within Franchisee's Territory if contact with the customer is initiated by the customer and not Franchisor; (vi) to use and license the use of technology to non-franchisee locations inside and outside the Territory; and (vii) engage in any other activities not expressly prohibited under this Agreement. Franchisee acknowledges and agrees that this Agreement does not grant it any right to (a) offer any product or service via e-commerce without prior approval by Franchisor, (b) establish an independent website or to establish a URL incorporating the Marks or any variation thereof, or (c) distribute, market, or implement Franchisor's products and services in any channel of distribution not specifically identified in this Agreement. Franchisee may not sell products through other channels of distribution such as wholesale, Internet or mail order sales. Franchisor is not required to pay Franchisor if Franchisor exercises any of its rights within the Territory.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees can engage in activities not expressly prohibited by the franchise agreement. Kidokinetics, as the franchisor, retains specific rights, including establishing and operating other franchised businesses outside the franchisee's territory, engaging in ventures with other businesses (even those offering similar products), and selling products or services through various channels like virtual classes or the internet.
Kidokinetics franchisees are restricted from operating outside their designated territory without written authorization. They also need prior approval to offer products or services via e-commerce, establish independent websites using Kidokinetics's marks, or use distribution channels not specified in the agreement. Furthermore, franchisees cannot sell products through wholesale, internet, or mail order sales.
This means that a Kidokinetics franchisee's operational latitude is defined by what is not explicitly forbidden, granting Kidokinetics a broad scope of action. However, the franchisee should seek clarification and written permission for any activities that might be construed as falling outside the bounds of the agreement to avoid potential breaches or disputes. Understanding these permitted activities is crucial for a prospective franchisee to ensure they can operate their Kidokinetics business effectively and within the bounds of the franchise agreement.