Who is considered an 'immediate family member' for the purposes of the Kidokinetics non-compete agreement?

According to Kidokinetics's 2024 Franchise Disclosure Document, an immediate family member is defined in the context of the non-compete agreement. Specifically, the document identifies immediate family members as a spouse, parent, sibling, child, or grandchild. This definition is important because a franchisee could be presumed to have violated the non-compete agreement if an immediate family member engages in prohibited activities or uses or discloses intellectual property related to the Kidokinetics business.

The FDD highlights that it would be difficult for Kidokinetics to prove whether a franchisee disclosed know-how or intellectual property to family members. Therefore, the agreement stipulates that if any of these immediate family members engage in prohibited activities, it will be presumed that the franchisee violated the terms of the agreement. However, the franchisee has the opportunity to rebut this presumption by providing evidence that they did not disclose the intellectual property to the family member.

This clause in the Kidokinetics franchise agreement is designed to prevent franchisees from circumventing the non-compete restrictions by involving close family members in competitive activities. It places a responsibility on the franchisee to ensure that their immediate family members do not engage in activities that could harm the Kidokinetics business, even after the franchisee is no longer directly involved with the franchise. This could be more restrictive than some franchise agreements, which may only directly restrict the franchisee themselves.