Does a Kidokinetics franchisee waive claims for damages if injunctive relief was wrongfully issued?

According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee expressly waives all claims for damages incurred as a result of the wrongful issuance of injunctive relief. This means that if a court issues an injunction against a Kidokinetics franchisee, and that injunction is later determined to have been issued in error, the franchisee cannot sue Kidokinetics for any financial losses suffered during the period the injunction was in place. The franchisee's sole recourse is to seek dissolution of the injunction itself.

This waiver has significant implications for prospective Kidokinetics franchisees. Injunctive relief can severely disrupt business operations, potentially leading to substantial financial losses. By agreeing to this waiver, franchisees assume the risk of these losses if an injunction is wrongfully issued. This could occur, for example, if Kidokinetics brings a legal action against a franchisee based on a misunderstanding of the facts or an incorrect interpretation of the franchise agreement, resulting in a temporary injunction that is later overturned.

Kidokinetics also states that failure to comply with the terms of the Franchise Agreement will cause substantial and irreparable damage to Kidokinetics and/or other Kidokinetics franchisees for which there is no adequate remedy at law. Therefore, any violation of the terms of the Franchise Agreement will entitle Kidokinetics to injunctive relief. Kidokinetics may apply for such injunctive relief without bond, but upon due notice. If a court requires the filing of a bond, the parties agree that the amount of the bond shall not exceed $1,000.

Prospective franchisees should carefully consider the potential financial impact of this waiver and consult with an attorney to fully understand their rights and obligations under the franchise agreement. It is crucial to assess the risk tolerance and financial stability needed to withstand potential losses resulting from a wrongfully issued injunction, as the franchisee will have no legal recourse against Kidokinetics for compensation.