What is the extent of Kidokinetics Franchisor's obligation to the franchisee regarding claims of infringement related to the KIDOLINK software?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
THIS SECTION 6.D.
STATES THE ENTIRE OBLIGATION OF FRANCHISOR AND FRANCHISOR'S AFFILIATES TO FRANCHISEE WITH RESPECT TO ANY CLAIM OF INFRINGEMENT.
- D. KIDOLINK Software and Franchisee's Right to Indemnification.
If a third party claims that the MOBILNK Software infringes any U.S. patent, copyright, or trade secret, Franchisor may elect, in its sole discretion, to defend Franchisee against such claim at Franchisor's expense and pay all damages that a court finally awards, provided that Franchisee promptly notifies Franchisor in writing of the claim, and allows Franchisor to control, and Franchisee cooperates with Franchisor in, the defense or any related settlement negotiations.
If such a claim is made or appears possible, Franchisor may, at its option, secure for Franchisee the right to continue to use the KIDOLINK Software or modify or replace the KIDOLINK Software so that it is non-infringing.
If neither of the foregoing options is available in Franchisor's judgment, Franchisor may terminate the license granted by this Agreement and require Franchisee to return the KIDOLINK Software without compensation.
Franchisor has no obligation with respect to any claim based on a version of the KIDOLINK Software that is modified without Franchisor's authorization or is combined, operated or used with any product, data, or apparatus not specified or approved by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the franchisor's entire obligation to the franchisee regarding claims of infringement is explicitly defined. If a third party claims that the KIDOLINK Software infringes any U.S. patent, copyright, or trade secret, Kidokinetics has the option to defend the franchisee against the claim at its own expense and pay any damages awarded by a court. However, this is contingent upon the franchisee promptly notifying Kidokinetics in writing and allowing Kidokinetics to control the defense and settlement negotiations.
Kidokinetics also has the option to secure the franchisee's right to continue using the KIDOLINK Software or modify or replace it to avoid infringement. If neither of these options is feasible in Kidokinetics' judgment, it can terminate the license and require the franchisee to return the software without compensation. Kidokinetics has no obligation if the claim is based on unauthorized modifications or use of the software with unapproved products.
This section of the Franchise Disclosure Document explicitly states that it defines the entire obligation of Kidokinetics and its affiliates to the franchisee regarding any infringement claim. This means that Kidokinetics' liability is limited to the actions described, and franchisees should be aware of these limitations and the conditions under which Kidokinetics will provide support in case of infringement claims.