After the Kidokinetics agreement expires, for how long is the franchisee restricted from operating a competing business?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.5.2.
Upon the expiration or earlier termination of this Agreement, or upon a Transfer and continuing for 24 months, Franchisee and Principals, and the spouse of Franchisee and each Principal if any, shall not, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Kidokinetics Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in Competing Business within a twenty (20) mile radius of the perimeter of (a) the Territory being granted hereunder, or (b) any other Territory licensed by Franchisor as of the date of expiration or termination of this Agreement; (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Kidokinetics franchisees; or (v) solicit business from customers of Franchisee's former Kidokinetics Business or contact any of Franchisor's suppliers or vendors for any competitive business purpose.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees and their principals face certain restrictions after the expiration or termination of their franchise agreement. Specifically, they are restricted from engaging in activities that could harm the Kidokinetics business or its goodwill for a period of 24 months. These restrictions apply to the franchisee, principals, and their spouses.
The restrictions include not diverting business or customers to competitors, participating in a competing business within a 20-mile radius of the granted territory or any other territory licensed by Kidokinetics, and performing any actions that could harm the goodwill associated with the Kidokinetics brand and system. Franchisees are also prohibited from interfering with the business of Kidokinetics or its franchisees and from soliciting business from customers of their former Kidokinetics business or contacting Kidokinetics's suppliers for competitive purposes.
These non-compete covenants are acknowledged by Kidokinetics franchisees as fair and reasonable, considering their other skills, experience, and education that allow them to derive income from other endeavors. If a franchisee engages in prohibited activities during the restricted period, that period will be extended by the amount of time they were engaging in those activities. These post-term covenants are designed to protect Kidokinetics's business interests and maintain the integrity of its franchise system.