Is the Kidokinetics franchisee's character a factor in the agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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- 15.2. Restrictions on Transfers by Franchisee. Franchisee's rights and duties under this Agreement are personal to Franchisee and/or Franchisee's Principal(s), and Franchisor has made this Agreement in reliance on Franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of Franchisee and/or Franchisee's Principals. Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval, which will not be unreasonably withheld. Franchisor may void any transfer made without such approval.
- 15.3. Transfers by Franchisee. 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, the character of a franchisee is a factor in the agreement. Specifically, Kidokinetics states that the franchisee's rights and duties are personal, and the agreement is made based on the franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of the franchisee and/or their principals. This indicates that Kidokinetics places significant importance on the personal attributes and capabilities of its franchisees.
This emphasis on character extends to potential transferees of the franchise as well. If a franchisee wishes to transfer their rights, the proposed transferee must be an individual of good moral character, or if the transferee is a business entity, its principals must be of good moral character. They must also meet Kidokinetics's standards for franchisees at the time of the transfer. This requirement ensures that anyone taking over a Kidokinetics franchise maintains the standards of integrity and ethical conduct expected by the franchisor.
For a prospective Kidokinetics franchisee, this means that their personal and professional reputation will be carefully considered during the application process. Kidokinetics is not only evaluating financial capacity and business acumen but also assessing whether the individual possesses the character traits that align with the brand's values. This is a common practice in franchising, as the success of a franchise system relies on maintaining a consistent brand image and customer experience, which is often influenced by the character and conduct of individual franchisees.
Furthermore, the good moral character requirement for transferees implies that selling a Kidokinetics franchise is not simply a matter of finding a buyer with sufficient funds. The buyer must also demonstrate that they meet Kidokinetics's standards for character and competence, which could potentially complicate or delay the transfer process. Franchisees should be aware that Kidokinetics retains the right to approve or disapprove any transfer based on these criteria.