What is the Kidokinetics franchisee obligated to do if their actions adversely affect the franchisor's rights?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
such action and the cost.
- 14.4. Indemnification. Franchisee and Franchisee's principals agree to indemnify, defend and hold Franchisor, its affiliates, and its respective members, directors, officers, employees, agents, partners, shareholders, agents, contractors, successors, assignees, personal representatives, heirs and legatees of all these persons or entities ("Indemnitees") harmless to the fullest extent permitted by law, from and against and to reimburse them for all claims, obligations, liabilities and damages ("Claims"), including any and all taxes, directly or indirectly arising out of, in whole or in part: (a) the operation of Franchisee's Kidokinetics Business, and Franchisee's advertising; (b) the use of the Marks and other Confidential Information; (c) the transfer of any interest in this Agreement or Franchisee's Kidokinetics Business in any manner not in accordance with this Agreement; (d) the infringement, alleged infringement, or any other violation or alleged violation by Franchisee or any of Franchisee's principals of any patent, mark or copyright or other proprietary right owned or controlled by third parties; or (e) libel, slander or any other form of defamation of Franchisor, the System, or System franchisees by Franchisee or any of Franchisee's principals. For purposes of this indemnification, "Claims" will mean and include all obligations, actual, consequential, punitive and other damages, and costs reasonably incurred in the defense of any action, including attorneys', attorney assistants' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses, whether or not such claims exceed the amount of insurance coverage available to Franchisor through Franchisee. Franchisor has the right to defend any such claim against Franchisor in the manner Franchisor deems appropriate or desirable in Franchisor's discretion. Such an undertaking by Franchisor will, in no manner or form, diminish Franchisee's and each of Franchisee's principals' obligations to indemnify the Indemnitees and to hold them harmless. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Franchisee agrees to give Franchisor notice of any action, suit, proceeding, claim, demand, inquiry, or investigation described above. The Indemnitees shall have the right, in their sole discretion, to: (i) retain counsel of their own choosing to represent them with respect to any Claim; and (ii) control the response thereto and the defense thereof, including the right to enter into an agreement to settle such Claim.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, if a franchisee's actions negatively impact Kidokinetics' rights, the franchisee is obligated to indemnify, defend, and hold Kidokinetics harmless. This means the franchisee must protect Kidokinetics from claims, obligations, liabilities, and damages, including taxes, that arise directly or indirectly from several factors. These include the operation and advertising of the Kidokinetics business, the use of trademarks and confidential information, and any transfer of interest in the franchise that doesn't comply with the agreement.
This indemnification extends to any alleged infringement or violation by the franchisee of patents, trademarks, copyrights, or other proprietary rights of third parties. It also covers libel, slander, or any form of defamation of Kidokinetics, the Kidokinetics system, or other Kidokinetics franchisees caused by the franchisee or their principals. The term "Claims" includes all actual, consequential, punitive, and other damages, as well as costs reasonably incurred in defending any action, including attorney's fees, investigation costs, court costs, and other litigation expenses, regardless of whether these claims exceed the available insurance coverage.
Kidokinetics retains the right to defend any claim against them in any manner they deem appropriate. However, this does not reduce the franchisee's obligation to indemnify and hold Kidokinetics harmless. Furthermore, the franchisee is required to notify Kidokinetics in writing within five days of any action, suit, or proceeding that could adversely affect the operation or financial condition of the franchisee's business. This includes any order, suit, or proceeding from a court, agency, or other government entity, as well as the receipt of any notice or citation.