How is the 'Franchisee Territory' defined within the Kidokinetics franchise agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
This Agreement grants Franchisee the right to operate the Kidokinetics Business from a single location within a Territory ("Kidokinetics Business Location") described and/or mapped in Attachment "B" to this Agreement and incorporated into this Agreement.
Except as otherwise provided for in this Agreement, as long as Franchisee is in compliance with the terms and conditions hereof, Franchisor agrees it will not operate, nor permit any other franchisee to operate, a Kidokinetics Business within the Territory using the same Marks.
Franchisee acknowledges that other franchisees may operate their Kidokinetics Businesses from home offices located within the Territory, however, such Franchisee shall not be granted the right to operate within the Territory.
Franchisee may not operate outside the Territory without express written authorization from Franchisor.
- 2.2.
Reservation of Rights.
Franchisee acknowledges and agrees that Franchisor and any parties Franchisor designates will have the right to: (i) establish and operate, and license third parties the right to establish and operate, other franchised businesses using the Marks and System at any location outside of the Territory; (ii) acquire, merge with, engage in joint ventures with, or otherwise affiliate with, and thereafter own and operate and franchise others the right to own and operate, any business of any kind, including businesses that offer products that are similar to those provided by a Franchised Business, within or outside the Territory; (iii) open and operate, or license third parties the right to open or operate, businesses that offer products and services similar to the Franchised Business under marks other than the Marks at any location; (iv) sell and distribute, directly or indirectly, or license others to sell and distribute, directly or indirectly, any products, services or merchandise, from any location or to any purchaser, through any channel or method of distribution (including, but not limited, to virtual classes, sales made by or through telemarketing, and/or on the Internet); (v) provide the services or sell products authorized for Kidokinetics Businesses to customers whose principal residence (or principal business office, if the customer is a business entity) is within Franchisee's Territory if contact with the customer is initiated by the customer and not Franchisor; (vi) to use and license the use of technology to non-franchisee locations inside and outside the Territory; and (vii) engage in any other activities not expressly prohibited under this Agreement.
Franchisee acknowledges and agrees that this Agreement does not grant it any right to (a) offer any product or service via e-commerce without prior approval by Franchisor, (b) establish an independent website or to establish a URL incorporating the Marks or any variation thereof, or (c) distribute, market, or implement Franchisor's products and services in any channel of distribution not specifically identified in this Agreement.
Franchisee may not sell products through other channels of distribution such as wholesale, Internet or mail order sales.
Franchisor is not required to pay Franchisor if Franchisor exercises any of its rights within the Territory.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the franchise agreement grants the franchisee the right to operate a Kidokinetics business from a single location within a defined territory. This territory is described and/or mapped in Attachment "B" of the agreement. Kidokinetics assures that, provided the franchisee complies with the agreement terms, it will not operate or allow another franchisee to operate a Kidokinetics business using the same marks within the franchisee's territory.
However, the agreement also specifies certain reservations of rights. Other franchisees may operate their Kidokinetics businesses from home offices located within the same territory, but they are not granted the right to operate within the territory. The franchisee is prohibited from operating outside their designated territory without explicit written authorization from Kidokinetics.
Kidokinetics retains the right to conduct various activities, including establishing and operating other franchised businesses outside the franchisee's territory, engaging in business ventures (even those offering similar products), and selling products or services through various channels, including online, to customers outside the franchisee's territory. Furthermore, Kidokinetics is not obligated to compensate the franchisee if it exercises any of its rights within the franchisee's territory. This means that while franchisees are granted a territory, Kidokinetics retains significant control over activities within and outside that territory, which could potentially impact the franchisee's business.