During my association with the Kidokinetics Business, am I allowed to participate as a consultant for a youth fitness business?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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:
- 18.5.1.
During the term of this Agreement, Franchisee, each Principal, 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 any youth fitness business or any other business offering any other goods or services offered or authorized for sale by System franchisees ("Competing Business"); (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Kidokinetics franchisees.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, during your association with the Kidokinetics business, you are generally prohibited from participating as a consultant for another youth fitness business. This restriction is in place to protect Kidokinetics's goodwill, system, and confidential information.
The franchise agreement specifies that you cannot be an owner, partner, director, officer, employee, consultant, or agent in any youth fitness business or any business offering goods or services that Kidokinetics franchisees are authorized to sell. This restriction applies to you, any principals involved in the franchise, and even the spouses of the franchisee and principals.
This non-compete covenant is standard in franchising to prevent franchisees from using the franchisor's proprietary information and systems to benefit a competing business. It ensures that your efforts are dedicated to growing your Kidokinetics franchise and not diverted to other ventures that could potentially harm the Kidokinetics brand. However, the franchisor may provide written approval to waive this restriction.
After the termination or transfer of your Kidokinetics franchise, a similar restriction applies for 24 months within a 20-mile radius of your territory or any other territory licensed by Kidokinetics. This extended restriction further protects Kidokinetics's interests even after your franchise agreement ends.