What is the Kidokinetics franchisee required to do regarding losses, expenses, and attorneys' fees relative to assignment or the transfer of right to franchise?

According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee is responsible for certain financial obligations when transferring their franchise. Specifically, the franchisee must pay a transfer fee to Kidokinetics. This fee is $10,000 for the first Kidokinetics business that a franchisee transfers. For each subsequent Kidokinetics business transferred by the same franchisee, the transfer fee is $5,000.

However, there is an exception to this fee structure. If Kidokinetics agrees to extend the transferee's term to ten years under a new franchise agreement, the transfer fee is replaced by Kidokinetics's then-current initial franchise fee under the new franchise agreement. This means that instead of paying the transfer fee, the new franchisee would pay the standard initial franchise fee that Kidokinetics charges at that time.

In addition to the transfer fee, the franchisee may also be responsible for other costs and expenses associated with the transfer. The FDD states that Kidokinetics's approval of the transfer does not waive any claims they may have against the transferring party. This implies that if the franchisee owes Kidokinetics any money or has violated the franchise agreement in any way, they will still be liable for those obligations even after the transfer is complete. It is important for prospective franchisees to understand all the costs associated with transferring a Kidokinetics franchise and to ensure they are in good standing with the franchisor before initiating the transfer process.