Does the Kidokinetics franchise agreement require franchisees to resell items not uniquely identified with Kidokinetics back to the franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- (h) A provision that requires you to resell to us items that are not uniquely identified with us. This subdivision does not prohibit a provision that grants to us a right of first refusal to purchase the assets of a Franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants us the right to acquire the assets of a Franchise for the market or appraised value of such assets if you have breached the lawful provisions of the Franchise Agreement and have failed to cure the breach in the manner provided in subdivision (c).
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, the franchise agreement does not require franchisees to resell items that are not uniquely identified with Kidokinetics back to the company, but there are some exceptions.
Specifically, in Michigan, the franchise agreement cannot require a franchisee to resell items not uniquely identified with Kidokinetics back to the company. However, Kidokinetics can retain a right of first refusal to purchase the assets of a franchise on the same terms as a third party. Kidokinetics can also acquire the assets at market or appraised value if the franchisee has breached the franchise agreement.
This means that while Kidokinetics cannot force a franchisee to sell back generic items, they can still have the opportunity to buy the franchise's assets under certain conditions, such as a third-party offer or a breach of contract. This clause appears to be specific to Michigan, as it is included in the state addendum.