What constitutes an event of default under the Kidokinetics Franchise Agreement related to Article 10?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.9. Continuing Obligation. Franchisee and each Principal acknowledge and agree that the representations, warranties and covenants set forth in this Article 10 are continuing obligations of Franchisee and each Principal, as applicable, and that any failure to comply with such representations, warranties and covenants constitutes an event of default under this Agreement. Franchisee and each Principal will cooperate with Franchisor in any efforts made by Franchisor to verify compliance with such representations, warranties and covenants.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a failure to comply with the representations, warranties, and covenants outlined in Article 10 of the Franchise Agreement constitutes an event of default. These obligations are continuing for both the franchisee and each principal involved.
Article 10 covers various aspects of the Kidokinetics business, including compliance with laws and regulations, obtaining and maintaining necessary licenses and permits, and ensuring the business operates ethically and legally. It also includes requirements related to financial transparency, such as providing access to tax filings and assigning telephone numbers and listings to Kidokinetics if requested.
This means that if a Kidokinetics franchisee or its principals fail to meet any of the obligations specified in Article 10, Kidokinetics has grounds to declare a default. This could ultimately lead to termination of the franchise agreement. Franchisees must understand and adhere to these obligations to avoid potential default and maintain a good standing with the franchisor.