Does the Kidokinetics franchise agreement bind the successors and assigns of the franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 20.2. Successors.
This Agreement binds and inures to the benefit of the successors and assigns of Franchisor and is personally binding on and inures to the benefit of Franchisee (including the individuals executing this Agreement on behalf of an entity if Franchisee is an entity) and its or their respective heirs, executors, administrators and successors or assigns; provided, however, the foregoing provision will not be construed to allow a transfer of any interest of Franchisee or Principals, if any, in this Agreement or the Kidokinetics Business Location, except in accordance with Article 15 hereof.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the franchise agreement does indeed bind the successors and assigns of the franchisor. This means that if Kidokinetics were to be acquired by another company or undergo a significant change in ownership, the terms of the existing franchise agreements would remain in effect and be legally binding on the new entity. This provides a level of security for the franchisee, ensuring that the agreement will continue to be honored even if the franchisor's business undergoes changes.
This clause also specifies that the agreement is personally binding on the franchisee, including individuals executing the agreement on behalf of an entity, and extends to their heirs, executors, administrators, and successors or assigns. However, this is qualified by the condition that no transfer of the franchisee's interest is allowed except as explicitly outlined in Article 15 of the agreement, which deals with the conditions under which a franchisee can transfer their interest in the Kidokinetics business.
This section clarifies that while the agreement is transferable, the franchisee cannot freely transfer their rights without Kidokinetics's consent, as detailed in Article 15. This ensures that Kidokinetics maintains control over who operates franchises within their system, even in cases of succession or assignment. Overall, this clause balances the franchisor's need for operational consistency with the franchisee's need for assurance that the agreement will be honored through changes in ownership.