Where in the Kidokinetics Franchise Agreement are the defaults described?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Provision | Section In the Franchise or Other Agreement | Summary |
|---|---|---|
| f. Termination by Franchisor with cause | Article 16 | We may terminate if you default for failure to comply with the obligations of the Franchise Agreement, or if you or an affiliate of yours defaults under any other agreement, including any other franchise agreement, with us or any of our affiliates, suppliers or landlord and do not cure the default within the time period provided in the other agreement. The Franchise Agreement describes defaults throughout. Please read it carefully. |
| g. "Cause" defined- | Sections 16.3 and 16.4 | You have five days to cure non-payments. You have 15 days to cure the following defaults: your failure to immediately endorse payments that are erroneously made to you; your failure to maintain prescribed days and hours of operations; your failure to personally supervise day-to-day operations; your failure to maintain the strict quality controls reasonably required by the Franchise Agreement and/or the Franchise Operations Manuals; and your failure to obtain or maintain any required licenses, certifications or permits. |
| curable defaults | ||
| h. "Cause" defined -non-curable defaults | Sections 16.1 and 16.2 | The Franchise Agreement will terminate automatically, without notice for the following defaults: insolvency; bankruptcy; written admission of inability to pay debts; receivership; levy; composition with creditors; unsatisfied final judgment for more than 30 days; or foreclosure proceeding that is not dismissed within 30 days. We may terminate the Franchise Agreement upon notice to you if you: fail to open the Kidokinetics Business within required time frames; falsify any report to us; abandon the Kidokinetics Business for five days or more, unless the premises are damaged and you apply to relocate; lose possession of the vehicles and equipment, unless as a result of a casualty event; fail to re-open the Kidokinetics Business within 120 days after a casualty; fail to comply with applicable laws; default under any lease for the premises; understate Gross Sales by 3% at any time or understate Gross Sales by any amount three or more times; attempt a transfer in violation of the Franchise Agreement; fail, or your legal representative fails to transfer as required upon your death or permanent disability; |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the defaults that could lead to termination of the franchise agreement by Kidokinetics are described throughout the agreement, especially in Article 16. The FDD specifies that termination may occur if a franchisee fails to meet the obligations outlined in the Franchise Agreement or defaults under any other agreement with Kidokinetics or its affiliates, suppliers, or landlords, without rectifying the default within the stipulated time frame.
The Franchise Agreement outlines both curable and non-curable defaults. Curable defaults, detailed in Sections 16.3 and 16.4, include non-payment (with a 5-day cure period) and other operational failures like not maintaining prescribed hours, failing to supervise daily operations, not adhering to quality controls, and failing to maintain necessary licenses or permits (each with a 15-day cure period).
Non-curable defaults, as described in Sections 16.1 and 16.2, lead to automatic termination without notice and include events like insolvency, bankruptcy, or an unsatisfied final judgment lasting over 30 days. Kidokinetics may also terminate the agreement if a franchisee fails to open the business on time, falsifies reports, abandons the business for five or more days (unless due to damage and relocation efforts), loses possession of necessary vehicles and equipment, fails to reopen after a casualty, violates applicable laws, defaults on a lease, understates gross sales by 3% or more at any time, or understates gross sales by any amount three or more times. Other causes for termination include attempting an unauthorized transfer of the franchise, failure to transfer the franchise as required upon death or disability, or misrepresentation or omission of information.