factual

Does the Kidokinetics franchise agreement grant the franchisee any ownership rights to the Kidokinetics Intellectual Property?

Kidokinetics Franchise · 2024 FDD

Answer from 2024 FDD Document

the Intellectual Property.

  • 13.2 No Interference. Neither Franchisee nor any Principal will take any action that would prejudice or interfere with the validity of Franchisor's or Licensor's rights with respect to the Intellectual Property. Nothing in this Agreement gives the Franchisee any right, title, or interest in or to any of the Intellectual Property or any of Franchisor's or Licensor's service marks, trademarks, trade names, trade dress, logos, copyrights or proprietary materials, except the right to use the Intellectual Property and the System in accordance with the terms and conditions of this Agreement for the operation of a Kidokinetics Business and only at or from the Kidokinetics Business Location or in approved advertising related to the Kidokinetics Business.
  • 13.3 Goodwill. Franchisee understands and agrees that any and all goodwill arising from Franchisee's use of the Intellectual Property and the System inures solely and exclusively to the benefit of Franchisor and Licensor, and upon expiration or termination of this Agreement and the license granted, no monetary amount will be assigned as attributable to any goodwill associated with Franchisee's use of the Intellectual Property.
  • 13.4 Validity. The Marks are valid and serve to identify the System and those who are authorized to operate under the System and Franchisee shall not contest the validity of, or Franchisor's or Licensor's interest in, the Intellectual Property or assist others to contest the validity of, or Franchisor's or Licensor's interest in, the Intellectual Property.
  • 13.5 Infringement. Franchisee acknowledges that any unauthorized use of the Intellectual Property constitutes an infringement of Franchisor's or Licensor's rights in the Intellectual Property and an event of default hereunder. Franchisee shall provide Franchisor or Licensor with all assignments, affidavits, documents, information and assistance Franchisor or Licensor reasonably requests to fully vest in Franchisor or Licensor all such rights, title and interest in and to the Intellectual Property, including all such items as are reasonably requested by Franchisor or Licensor to register, maintain and enforce such rights in the Intellectual Property.
  • 13.6 Substitution. Franchisor reserves the right to substitute different Marks for use in identifying the System and the Kidokinetics Business if the current Marks no longer can be used by Franchisor, or if Franchisor, in its sole discretion, determines that substitution of different Marks will be beneficial to the System. In such event, Franchisor will require Franchisee, at Franchisee's expense, to discontinue or modify Franchisee's use of any of the Marks or to use one or more additional or substitute Marks no later than 10 days after notification thereof.
  • 13.7 Franchisee's Use of the Intellectual Property. With respect to Franchisee's use of the Intellectual Property pursuant to this Agreement, Franchisee further agrees that:
    • 13.7.1 Unless otherwise authorized or required by Franchisor, Franchisee shall advertise the Kidokinetics Business only under the Mark "Kidokinetics ®," and design. Franchisee must use only the Marks that Franchisor designates, and must use them only in the manner Franchisor authorizes and permits. Franchisee must use the Marks only for the operation of the Kidokinetics Business at the location approved by Franchisor and for advertising the Kidokinetics Business. Franchisee shall not use the Marks as part of its corporate or other legal name, and shall obtain the Franchisor's approval of its corporate or other legal name prior to filing it with the applicable

state authority. Franchisee shall comply with Franchisor's instructions in filing and maintaining the requisite trade name or fictitious name registrations, and shall execute any documents deemed necessary by Franchisor or its counsel to obtain protection of the Marks or to maintain their continued validity and enforceability. All fictitious names used by Franchisee will bear the designation "a franchisee of Kidokinetics Franchisee LLC". Franchisee must promptly register at the office of each county in which Franchisee's Kidokinetics Business operates, or at such other public office as provided for by the laws of the state in which Franchisee's Kidokinetics Business is located, as doing business under such assumed business name.

Source: Item 22 — CONTRACTS (FDD page 59)

What This Means (2024 FDD)

According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees do not acquire any ownership rights to the company's intellectual property. The franchise agreement explicitly states that franchisees only have the right to use the intellectual property and the Kidokinetics system according to the agreement's terms and conditions for operating a Kidokinetics business. This use is restricted to the approved Kidokinetics Business Location or in approved advertising related to the Kidokinetics Business.

The agreement clarifies that all goodwill arising from the franchisee's use of the intellectual property benefits Kidokinetics exclusively. Upon the agreement's expiration or termination, the franchisee will not receive any monetary compensation for goodwill associated with their use of the intellectual property. Franchisees are also prohibited from taking any actions that could harm the validity of Kidokinetics's rights to its intellectual property.

Furthermore, franchisees must assist Kidokinetics in protecting its intellectual property by providing necessary documents and assistance to register, maintain, and enforce these rights. Unauthorized use of the intellectual property by the franchisee constitutes an infringement of Kidokinetics's rights and a default under the franchise agreement. Franchisees are also required to identify themselves as independent Kidokinetics franchisees in conjunction with any use of the intellectual property on business-related materials.

In essence, the Kidokinetics franchise agreement ensures that all rights, title, and interest in the intellectual property remain with Kidokinetics, and the franchisee's use is strictly limited to operating the franchise under the terms of the agreement. This is a common arrangement in franchising, where the franchisor retains control over its brand and system, while granting franchisees a limited license to operate under that brand.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.