Does the Kidokinetics franchisee acknowledge that acquired facilities may be proximate to the Territory?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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; (iv) sell and distribute, directly or indirectly, or license others to sell and distribute, directly or indirectly, any products, services or merchandise, from any location or to any purchaser, through any channel or method of distribution (including, but not limited, to virtual classes, sales made by or through telemarketing, and/or on the Internet); (v) provide the services or sell products authorized for Kidokinetics Businesses to customers whose principal residence (or principal business office, if the customer is a business entity) is within Franchisee's Territory if contact with the customer is initiated by the customer and not Franchisor; (vi) to use and license the use of technology to non-franchisee locations inside and outside the Territory; and (vii) engage in any other activities not expressly prohibited under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee acknowledges that Kidokinetics and parties it designates have the right to acquire businesses of any kind, including those offering similar products, within or outside the franchisee's territory. Kidokinetics also retains the right to establish and operate other franchised businesses using the Kidokinetics marks and system outside of the franchisee's territory.
This means that while a Kidokinetics franchisee is granted a specific territory, Kidokinetics retains significant rights to operate or license other businesses, even those similar to the franchised business, outside of that territory. This could potentially lead to competition from other Kidokinetics-related ventures, although they would be outside the franchisee's defined territory.
Kidokinetics is also allowed to sell and distribute products and services through various channels, including virtual classes and the internet, without restriction. These activities can occur irrespective of a franchisee's territory. This could impact a franchisee's business if Kidokinetics or its licensees directly target customers within the franchisee's territory through these alternative channels. Prospective franchisees should consider the potential for competition from Kidokinetics's other ventures and alternative distribution methods when evaluating the franchise opportunity.