What are the consequences if an immediate family member of a manager or officer of a Kidokinetics franchisee engages in Prohibited Activities?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
You acknowledge that you could circumvent the purpose of this Agreement by disclosing Know-how to an immediate family member (i.e., spouse, parent, sibling, child, grandparent or grandchild).
You also acknowledge that it would be difficult for us to prove whether you disclosed the Know-how to family members.
Therefore, you agree that you will be presumed to have violated the terms of this Agreement if any member of your immediate family: (i) engages in any Prohibited Activities during any period of time during which you are prohibited from engaging in the
Prohibited Activities; or (ii) uses or discloses the Know-how. However, you may rebut this presumption by furnishing evidence conclusively showing that you did not disclose the Know-how to the family member.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, if an immediate family member of a manager or officer of a Kidokinetics franchise engages in Prohibited Activities, it is presumed that the manager or officer has violated the terms of their agreement. Immediate family members include a spouse, parent, sibling, child, grandparent, or grandchild. Prohibited Activities are not specifically defined in the provided excerpts, but generally refer to actions that unfairly compete with Kidokinetics.
However, the manager or officer has the opportunity to rebut this presumption by providing conclusive evidence that they did not disclose Know-how (confidential information and trade secrets) to the family member. This means the burden of proof shifts to the manager or officer to demonstrate their innocence.
This clause is designed to prevent individuals from circumventing non-compete agreements by using family members to engage in activities they are personally restricted from doing. The franchisee acknowledges that proving such a disclosure would be difficult for Kidokinetics, hence the presumption of guilt. This highlights the importance of maintaining strict confidentiality and ensuring that family members understand the restrictions in place. Failure to comply with the terms of the agreement can result in injunctive relief, potentially preventing the franchisee from operating, and other legal remedies.