What form should the covenants for the Kidokinetics franchisee's Manager and management level personnel take?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
obligations under this Agreement; and
- 10.2.8. Each Principal and each Principal's spouse will personally execute and bind himself or herself to the Guaranty and Confidentiality and Non-Compete Agreement, in the forms of Attachments E and F to this Agreement, respectively. Each shall jointly and severally guarantee Franchisee's performance of all of Franchisee's obligations, covenants and agreements under the Agreement, and otherwise bind themselves to the terms of this Agreement as stated herein, pursuant to the terms and conditions of the Guaranty and Confidentiality and Non-Compete Agreement.
- 10.3. Appointment of Manager. Franchisee, or its shareholder or member if Franchisee is an entity, must devote his/her full-time attention and best efforts to the management and operation of the Franchised Business,
or may delegate the day-to-day operations of the Franchised Business to a manager ("Manager"). Franchisee may not appoint a Manager who is not the Franchisee or Principal of the Franchisee, if an entity, without the approval of Franchisor. All requests regarding appointment of a Manager must be in writing. The Manager shall meet Franchisor's standards and criteria, as set forth in the Franchise Operations Manual or otherwise in writing by Franchisor, and will be an individual otherwise acceptable to Franchisor in its sole discretion. The Manager will devote his or her full time and best efforts to the supervision and management of the Kidokinetics Business, and may not engage in any other business activity without the Franchisor's consent, which may be withheld in Franchisor's sole discretion. The Manager will satisfy the training requirements set forth in Article 6. If the Franchised Business is operated by a Manager, then a Principal of Franchisee must devote at least 20 hours of work per month to the operation of the Franchised Business.
- 10.3.1. If the Manager is not able to continue to serve in such capacity, or no longer qualifies to act as such in accordance with this Agreement, Franchisee will promptly notify Franchisor and request approval for a replacement within 30 days after the Manager ceases to serve, such replacement being subject to the same qualifications required by this Agreement (including, but not limited to, completing all training and obtaining all certifications required by Franchisor). Franchisor will approve or disapprove of the replacement Manager within 30 days.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, each Principal and each Principal's spouse must personally execute and adhere to both the Guaranty and the Confidentiality and Non-Compete Agreement, utilizing the forms provided as Attachments E and F to the Franchise Agreement. These individuals are jointly and severally responsible for guaranteeing the franchisee's fulfillment of all obligations, covenants, and agreements as outlined in the Franchise Agreement. They must also adhere to the terms specified within the Guaranty and Confidentiality and Non-Compete Agreement.
Kidokinetics requires that if a franchisee chooses to appoint a manager, that manager must meet the standards and criteria set by Kidokinetics, as detailed in the Franchise Operations Manual or in other written communications from the franchisor. The manager must dedicate their full-time efforts to supervising and managing the Kidokinetics business and cannot engage in any other business activities without the franchisor's explicit consent. The manager is also required to fulfill the training requirements outlined in Article 6 of the Franchise Agreement. If a manager is in place, a Principal of the franchisee must still dedicate at least 20 hours per month to the operation of the franchised business.
Furthermore, both the franchisee and each Principal acknowledge that they will receive valuable training, trade secrets, and confidential information about the Kidokinetics system. In return for this specialized training, trade secrets, confidential information, and rights, the franchisee and each Principal must agree to certain non-competition covenants, unless otherwise approved in writing by Kidokinetics. This ensures the protection of Kidokinetics's proprietary information and competitive advantage within the market.