Can a Kidokinetics franchisee suffer or permit any assignment, transfer, or encumbrance to occur by operation of law without first obtaining written consent of the Franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber this Agreement or any right or interest herein or hereunder (a "Transfer"), the Kidokinetics Business or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless it first obtains the written consent of Franchisor, except as provided in Section 15.6 of this Agreement.
A transfer of any stock in the Franchisee if it is a corporation or a transfer of any ownership rights in Franchisee if it is a partnership, a limited liability company or limited partnership is a Transfer and is prohibited without prior written consent of Franchisor.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee is restricted from transferring any aspect of their franchise without the franchisor's written consent. Specifically, the franchisee cannot sell, assign, transfer, give, devise, convey, or encumber the Franchise Agreement, any rights or interests within it, the Kidokinetics business itself, or any of its assets outside the normal course of business.
This restriction extends to preventing any such assignment, transfer, or encumbrance from occurring by operation of law unless the franchisee first obtains written consent from Kidokinetics. Furthermore, any transfer of stock in the franchisee's corporation or ownership rights in a partnership, limited liability company, or limited partnership also requires prior written consent from Kidokinetics.
This provision ensures that Kidokinetics maintains control over who operates its franchises and protects the brand's integrity. It allows Kidokinetics to vet potential new owners and ensure they meet the company's standards. A prospective franchisee should understand these restrictions on transfer, as failing to obtain prior written consent can result in the transfer being voided by Kidokinetics.