In a Kidokinetics franchise transfer, what must the franchisee agree to regarding claims against the transferee?

According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee transferring their business must agree to subordinate any claims they may have against the transferee to Kidokinetics. This means that in the event of a dispute or financial claim, Kidokinetics's interests take precedence over the original franchisee's claims against the new owner.

Additionally, the franchisee must indemnify Kidokinetics for any acts, whether negligent or intentional, committed by the franchisee during the sales negotiations between the franchisee and the transferee. This means the franchisee is responsible for protecting Kidokinetics from any liability resulting from their actions or omissions during the transfer process. This could include misrepresentations made to the transferee or failure to disclose important information.

This requirement protects Kidokinetics from potential legal issues arising from the transfer process and ensures that Kidokinetics maintains its position as the primary stakeholder. It also incentivizes the franchisee to conduct the transfer process responsibly and transparently. Prospective franchisees should carefully consider these obligations and seek legal counsel to fully understand their implications before initiating a transfer.