Does the expiration or termination of the Kidokinetics agreement release the franchisee from accrued liabilities?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
may be exercised or taken at any time and from time to time. The expiration, earlier termination or exercise of Franchisor's rights pursuant to Article 16 do not discharge or release Franchisee or any Principal from any liability or obligation then accrued, or any liability or obligation continuing beyond, or arising out of, the expiration, the earlier termination or the exercise of such rights under this Agreement.
- 20.10. Counterparts. This Agreement may be executed in multiple counterparts, each of which when so executed are an original, and all of which shall constitute one and the same instrument.
- 20.11. Survival.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the expiration or termination of the franchise agreement does not release the franchisee from accrued liabilities. Specifically, the agreement states that any liability or obligation of the franchisee that has accrued or continues beyond the termination of the agreement remains in effect. This means that even after the franchise agreement ends, the franchisee is still responsible for any outstanding debts, fees, or other obligations that were incurred during the term of the agreement.
This provision protects Kidokinetics by ensuring that franchisees cannot avoid their financial responsibilities by simply terminating the agreement. It also provides clarity for both parties regarding their respective obligations upon termination. Common examples of liabilities that might survive termination include unpaid franchise fees, outstanding vendor payments, or costs associated with damages caused by the franchisee's default.
Furthermore, the Kidokinetics agreement specifies that any obligation of the franchisee that contemplates performance after the termination or expiration of the agreement is deemed to survive such termination or expiration. This includes obligations such as non-compete clauses, confidentiality agreements, and any other duties that are intended to extend beyond the active term of the franchise. This ensures that the franchisee cannot use the termination of the agreement as a means to circumvent these ongoing responsibilities.
In summary, a prospective Kidokinetics franchisee should understand that termination of the franchise agreement does not provide a clean slate regarding financial or contractual obligations. It is crucial to maintain compliance with all terms of the agreement throughout its duration to avoid potential liabilities that could persist even after the franchise relationship ends.