Does the Kidokinetics agreement require written approval from the franchisor for any exceptions to the non-compete covenants?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee and each Principal, if any, specifically acknowledge that, pursuant to this Agreement, Franchisee and each Principal, if any, will receive valuable training, trade secrets and Confidential Information of the System that are beyond the present knowledge, training and experience of Franchisee, each Principal and Franchisee's managers and employees.
Franchisee and each Principal, if any, acknowledge that such specialized training, trade secrets and Confidential Information provide a competitive advantage and will be valuable to them in the development and operation of the Kidokinetics Business, and that gaining access to such specialized training, trade secrets and Confidential Information is, therefore, a primary reason why Franchisee and each Principal, if any, are entering into this Agreement.
In consideration for such specialized training, trade secrets, Confidential Information and rights, Franchisee and each Principal, if any, covenant that, except as otherwise approved in writing by Franchisor:
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the non-competition covenants in the agreement require written approval from the franchisor for any exceptions. Specifically, the franchisee and each principal acknowledge that they will receive valuable training, trade secrets, and confidential information of the Kidokinetics system.
The FDD states that this specialized training and information provides a competitive advantage and is a primary reason for entering into the agreement. In return for this training, trade secrets, confidential information, and rights, the franchisee and each principal covenant that, except as otherwise approved in writing by Kidokinetics, they will adhere to the non-competition terms.
This means that if a franchisee or principal wishes to engage in any activity that would otherwise be prohibited by the non-competition covenants, they must obtain prior written approval from Kidokinetics. This requirement ensures that Kidokinetics maintains control over its confidential information and protects its competitive advantage. It is important for prospective franchisees to understand this requirement and to consider its implications for their future business activities.