Is a Kidokinetics franchisee prohibited from contacting any of the franchisor's suppliers or vendors for any competitive business purpose?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
(v) solicit business from customers of any Kidokinetics Business or contact any of Franchisor's suppliers or vendors for any competitive business purpose.
18.5.2.
Upon the expiration or earlier termination of this Agreement, or upon a Transfer and continuing for 24 months, Franchisee and Principals, and the spouse of Franchisee and each Principal if any, 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 Competing Business within a twenty (20) mile radius of the perimeter of (a) the Territory being granted hereunder, or (b) any other Territory licensed by Franchisor as of the date of expiration or termination of this Agreement; (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Kidokinetics franchisees; or (v) solicit business from customers of Franchisee's former Kidokinetics Business or contact any of Franchisor's suppliers or vendors for any competitive business purpose.
- 18.6.
Reasonableness of Restrictions.
Franchisee acknowledges and agrees that the covenants not to compete set forth in this Agreement are fair and reasonable and will not impose any undue hardship on Franchisee or Principals, if any, since Franchisee or Principals, as the case may be, have other considerable skills, experience and education which afford Franchisee or Principals, as the case may be, the opportunity to derive income from other endeavors.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are prohibited from contacting Kidokinetics's suppliers or vendors for any competitive business purpose. This restriction applies both during the term of the Franchise Agreement and for a period of 24 months after the agreement's expiration or termination. This is to protect Kidokinetics's relationships with its suppliers and vendors and to prevent franchisees from using this information to unfairly compete with Kidokinetics or other franchisees within the system.
This restriction is part of a broader set of covenants designed to protect Kidokinetics's business interests, including non-compete clauses and confidentiality agreements. These measures prevent franchisees from diverting business, engaging in activities that harm the goodwill associated with the Kidokinetics brand, or interfering with the business of Kidokinetics or its franchisees. The FDD states that these restrictions are considered reasonable and do not impose undue hardship on the franchisee, as they are expected to have other skills and experiences to derive income from other endeavors.
For a prospective Kidokinetics franchisee, this means they cannot leverage their knowledge of Kidokinetics's supply chain to start a competing business or benefit a competitor. This restriction is common in franchising to safeguard the franchisor's established relationships and trade secrets. Franchisees should carefully consider these restrictions and how they might impact their future business activities, especially if they plan to exit the Kidokinetics system after the agreement term.