Can a Kidokinetics franchisee be a consultant for a children's sports business during the franchise term?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Section In the Franchise or Other Agreement | Summary | |
|---|---|---|---|
| q. | Non-competition covenants during the term of the franchise | Section 18.5.1 | You, each principal, and your and your principals' spouses shall not, either directly or indirectly, for themselves or through, on behalf of, or in conjunction with, any person or entity: (i) divert, or attempt to divert, any business or customer of the Kidokinetics Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any children's sports or fitness business or any other business offering any other goods or services offered or authorized for sale by System franchisees ("Competing Business"); (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize our business or the business of any Kidokinetics franchisees (Subject to applicable state law). |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee is restricted from acting as a consultant for a children's sports business during the term of the franchise agreement. Specifically, Section 18.5.1 of the agreement prohibits the franchisee, their principals, and their spouses from participating as a consultant in any children's sports or fitness business, or any business offering goods or services that are offered or authorized for sale by Kidokinetics franchisees. This restriction applies both directly and indirectly.
This non-compete clause ensures that franchisees remain fully committed to the Kidokinetics system and do not divert business or knowledge to competing entities. It protects Kidokinetics's market position and the interests of other franchisees within the system. The clause covers a broad range of activities, including acting as an owner, partner, director, officer, employee, or agent for a competing business.
For a prospective Kidokinetics franchisee, this means that they must cease any existing consulting roles in the children's sports or fitness industry before starting their franchise. They must also refrain from taking on such roles during the entire term of their franchise agreement. This restriction is a standard practice in franchising to prevent conflicts of interest and maintain brand integrity. Violation of this clause could lead to termination of the franchise agreement.
After the franchise agreement expires or is terminated, a different set of non-compete restrictions apply for a period of 24 months, as detailed in Section 18.5.2. These post-term restrictions include limitations on participating in a Competing Business within a specified radius of the franchisee's former Kidokinetics business and other Kidokinetics businesses.