What is the duration of the 'Restricted Period' after ceasing to be a manager or officer of a Kidokinetics franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ir business to you or to any other person that is not then a franchisee of ours.
- "Restricted Period" means the 24 months-year period after you cease to be a manager or officer of Franchisee's Kidokinetics business; provided, however, that if a court of competent jurisdiction determines that this period of time is too long to be enforceable, then the "Restricted Period" means the
12 months-year period after you cease to be a manager or officer of Franchisee's Kidokinetics business.
"Restricted Territory" means the geographic area within: (i) a twenty (20) mile radius of the perimeter of (a) the Territory being granted hereunder, or (b) any other Territory licensed by Franchisor as of the date of expiration or termination of this Agreement; provided, however, that if a court of competent jurisdiction determines that the foregoing Restricted Territory is too broad to be enforceable, then the "Restricted Territory" means the geographic area within a 10-mile radius from Franchisee's Kidokinetics business (and including the premises of the approved location of Franchisee).
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the 'Restricted Period' is defined as 24 months after an individual ceases to be a manager or officer of a Kidokinetics franchise. This means that for two years after leaving a management role, the former manager or officer is subject to certain restrictions, primarily related to unfair competition. However, if a court deems this 24-month period too long to be enforceable, the 'Restricted Period' will be shortened to 12 months.
During the Restricted Period, the former manager or officer is prohibited from engaging in 'Prohibited Activities,' such as owning or operating a competitive business within a defined geographic area. This area is known as the 'Restricted Territory,' which initially extends 20 miles from the perimeter of the franchise's territory or any other territory licensed by Kidokinetics. If a court finds this 20-mile radius too broad, the Restricted Territory shrinks to a 10-mile radius from the Kidokinetics business location.
It's important to note that if the former manager or officer engages in any Prohibited Activities during the Restricted Period, the period is automatically extended by the amount of time they were engaging in those activities. This clause is designed to prevent individuals from circumventing the non-compete agreement by briefly engaging in prohibited activities and then claiming the Restricted Period has expired. Prospective franchisees and managers should carefully consider these restrictions and their potential impact on future business ventures.