Does the Kidokinetics franchisee acknowledge that acquired facilities may be within the Territory?
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;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the franchisee acknowledges that Kidokinetics retains the right to acquire or merge with any business, including those offering similar products, within or outside the franchisee's territory. This means that Kidokinetics could potentially acquire a business operating within a franchisee's territory. However, Kidokinetics represents that it will not convert any such acquired facilities operating within the territory to a Kidokinetics franchise.
This clause is important for prospective franchisees as it clarifies the scope of their territorial protection. While Kidokinetics reserves the right to acquire businesses that might compete with a franchisee, it commits to not converting those acquired businesses into competing Kidokinetics franchises within the franchisee's territory. This provides some assurance that the franchisee's core Kidokinetics business will not face direct competition from newly converted franchises.
It is important to note that this protection only extends to conversions into Kidokinetics franchises. Kidokinetics is not restricted from operating similar businesses under different brand names or through other channels, as stated in the Reservation of Rights. Franchisees should carefully consider this aspect and evaluate the potential impact of such competition on their business. Franchisees should seek clarification from Kidokinetics regarding any plans for operating similar businesses within or near their territory under different brands.