Does the Kidokinetics franchisee acknowledge that acquired facilities may be proximate to any of the franchisee's locations?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor.
- 2.2. Reservation of Rights. Franchisee acknowledges and agrees that Franchisor and any parties Franchisor designates will have the right to: (i) establish and operate, and license third parties the right to establish and operate, other franchised businesses using the Marks and System at any location outside of the Territory; (ii) acquire, merge with, engage in joint ventures with, or otherwise affiliate with, and thereafter own and operate and franchise others the right to own and operate, any business of any kind, including businesses that offer products that are similar to those provided by a Franchised Business, within or outside the Territory; (iii) open and operate, or license third parties the right to open or operate, businesses that offer products and services similar to the Franchised Business under marks other than the Marks at any location;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees acknowledge that Kidokinetics and parties they designate have the right to acquire, merge with, engage in joint ventures with, or otherwise affiliate with any business of any kind, including those that offer similar products, within or outside the franchisee's territory. They also have the right to open and operate businesses that offer similar products and services under different marks at any location.
This means that Kidokinetics retains considerable freedom to expand its operations, even if those operations might compete with an existing franchisee. Kidokinetics is also not restricted from selling or licensing others to sell products and services through various channels, including virtual classes and the internet, regardless of the franchisee's territory.
Kidokinetics is also not required to compensate the franchisee if it exercises any of these rights within the franchisee's territory. This clause highlights the importance of understanding the scope of the granted territory and the potential for competition from the franchisor or other channels. A prospective franchisee should carefully consider these factors and evaluate the market potential within their territory, taking into account the franchisor's reserved rights.