What is the Kidokinetics franchisee obligated to do regarding debts or obligations on behalf of the franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ry for the conduct of the Kidokinetics Business. Franchisee agrees to pay all current obligations and liabilities to suppliers, lessors, and creditors on a timely basis. Franchisee agrees to indemnify Franchisor in the event that Franchisor is held responsible for debts owed by Franchisee if Franchisor elects to pay any of Franchisee's obligations in order to preserve the relationship between any System suppliers and System franchisees. Franchisee agrees to make prompt payment of all federal, state and local taxes, including individual and corporate taxes, sales and use taxes, franchise taxes, gross receipts taxes, employee withholding taxes, FICA taxes,
personal property and real estate taxes arising from Franchisee's operation of the Kidokinetics Business. Franchisee agrees to indemnify Franchisor in the event that Franchisor is held responsible for these taxes.
- 11.8. Telephone. Franchisee must obtain a new telephone number and telephone listing at Franchisee's expense, to be listed under the "Kidokinetics" name and not under Franchisee's corporate, partnership, or individual name, and to be used exclusively in connection with Franchisee's operation of the Kidokinetics Business. Upon the expiration, transfer or termination of this Agreement for any reason, Franchisee must terminate Franchisee's use of such telephone number and listing and assign the same to Franchisor or Franchisor's designee. Franchisee must answer the telephone in the manner Franchisor specifies in the Franchise Operations Manual.
- 11.9. Personal Conduct. Franchisee agrees to refrain from committing any act or pursuing any course of conduct that tends to bring Franchisor's Marks into disrepute.
- 11.10. Image. Franchisee acknowledges that Franchisor has developed the System to offer and sell services that will distinguish the Kidokinetics Business from other youth fitness programs that offer similar services valued at different prices and with less attention paid to service quality and customer service.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the franchisee has specific obligations regarding debts and liabilities. The franchisee is responsible for paying all current obligations and liabilities to suppliers, lessors, and creditors in a timely manner. This means a franchisee must manage their finances carefully to ensure all bills related to the business are paid when due.
Furthermore, the Kidokinetics franchisee agrees to indemnify the franchisor if the franchisor is held responsible for the franchisee's debts. This indemnification extends to federal, state, and local taxes, including individual and corporate taxes, sales and use taxes, franchise taxes, gross receipts taxes, employee withholding taxes, FICA taxes, personal property, and real estate taxes arising from the franchisee's operation of the Kidokinetics business. Therefore, if Kidokinetics incurs costs due to the franchisee's failure to pay these obligations, the franchisee must reimburse Kidokinetics.
In the event of a default by the franchisee, Kidokinetics has the option to cure the default on the franchisee's behalf and at the franchisee's expense. The franchisee is then required to immediately pay Kidokinetics the costs incurred. Kidokinetics can also take over the business location and operate the Kidokinetics business until the default is resolved. During such operation by Kidokinetics, the franchisee must pay Kidokinetics ten percent of the gross sales generated by the business as compensation, in addition to all other fees paid under the agreement. This highlights the importance of financial responsibility and adherence to the franchise agreement to avoid potential financial burdens and loss of control over the business.