Is the Franchise Disclosure Questionnaire applicable for Kidokinetics franchise sales to residents of Rhode Island?

According to Kidokinetics' 2024 Franchise Disclosure Document, the Franchise Disclosure Questionnaire is not to be used for any franchise sale in or to residents of Rhode Island. This means that prospective Kidokinetics franchisees residing in Rhode Island are not required to complete the questionnaire as part of the franchise sales process.

However, the FDD also includes a section specific to Rhode Island, addressing the Rhode Island Franchise Investment Act. This section states that any provision in a franchise agreement restricting jurisdiction or venue to a forum outside of Rhode Island or requiring the application of the laws of another state is void with respect to a claim otherwise enforceable under the Act. The FDD, the Franchise Agreement, and the Supplemental Agreements are amended accordingly to the extent required by law.

Kidokinetics states that they do not agree with the above language and believe that each of the provisions of the Franchise Agreement and the Supplemental Agreements, including all choice of law provisions, are fully enforceable. Kidokinetics intends to fully enforce all of the provisions of the Franchise Agreement, the Supplemental Agreements, and all other documents signed by them, including, but not limited to, all venue, choice-of-law, arbitration provisions and other dispute avoidance and resolution provisions and to rely on federal pre-emption under the Federal Arbitration Act. This highlights a potential legal conflict between the franchisor's intent and Rhode Island state law, which prospective franchisees should be aware of.