Is the Kidokinetics franchisee's financial capacity a factor in the agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the financial capacity of a prospective franchisee is a significant factor in the franchise agreement. Kidokinetics emphasizes that the agreement is made in reliance on the franchisor's assessment of the franchisee's financial capacity. This indicates that Kidokinetics carefully evaluates the financial stability of potential franchisees to ensure they can meet the financial obligations and operational requirements of the business.
This consideration extends to the transfer of the franchise. If a franchisee wishes to transfer their rights, the proposed transferee must demonstrate sufficient business experience, aptitude, and financial resources to operate the Kidokinetics business and comply with the franchise agreement. This requirement ensures that any new owner is capable of maintaining the standards and financial health of the franchise.
Furthermore, Kidokinetics requires franchisees to provide their most recent financial statements and tax returns, as well as those of any principal involved. These documents must accurately represent the financial position of the franchisee. The franchisee must also maintain sufficient working capital to fulfill their obligations under the agreement. This ongoing requirement highlights the importance of sustained financial health throughout the term of the franchise agreement.