Is a Kidokinetics franchisee prohibited from soliciting business from customers of any Kidokinetics business?
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.
- c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained, and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor.
- d. If the period of time or the geographic scope specified in Section 2.b. above should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable. In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees face restrictions on soliciting business from customers of any Kidokinetics business, both during the franchise term and for a period after the agreement ends. Specifically, during the term of the agreement, franchisees are prohibited from diverting or attempting 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. This means a franchisee cannot actively try to take customers away from the Kidokinetics system to benefit a competing business.
Post-termination, for a period of 24 months after the agreement expires or is terminated, the franchisee is restricted from soliciting business from customers of the franchisee's former Kidokinetics Business. This restriction applies to the franchisee, their principals, and their spouses. The restrictions also include not interfering with the business of Kidokinetics or any of its franchisees. These measures are in place to protect the goodwill associated with the Kidokinetics brand and system.
These restrictions are acknowledged by Kidokinetics franchisees as fair and reasonable, recognizing that they possess other skills and experiences to derive income from other endeavors. The FDD also states that these covenants are reasonable limitations as to time, geographical area, and scope of activity to be restrained, and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Kidokinetics. If any part of these restrictions is deemed unreasonable, the terms will be adjusted to be enforceable.