What is the Kidokinetics franchisee's obligation regarding the appointment of a Manager if the franchisee is an entity?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
greement.
- 10.3. Appointment of Manager. Franchisee, or its shareholder or member if Franchisee is an entity, must devote his/her full-time attention and best efforts to the management and operation of the Franchised Business,
or may delegate the day-to-day operations of the Franchised Business to a manager ("Manager"). Franchisee may not appoint a Manager who is not the Franchisee or Principal of the Franchisee, if an entity, without the approval of Franchisor. All requests regarding appointment of a Manager must be in writing. The Manager shall meet Franchisor's standards and criteria, as set forth in the Franchise Operations Manual or otherwise in writing by Franchisor, and will be an individual otherwise acceptable to Franchisor in its sole discretion. The Manager will devote his or her full time and best efforts to the supervision and management of the Kidokinetics Business, and may not engage in any other business activity without the Franchisor's consent, which may be withheld in Franchisor's sole discretion. The Manager will satisfy the training requirements set forth in Article 6. If the Franchised Business is operated by a Manager, then a Principal of Franchisee must devote at least 20 hours of work per month to the operation of the Franchised Business.
- 10.3.1. If the Manager is not able to continue to serve in such capacity, or no longer qualifies to act as such in accordance with this Agreement, Franchisee will promptly notify Franchisor and request approval for a replacement within 30 days after the Manager ceases to serve, such replacement being subject to the same qualifications required by this Agreement (including, but not limited to, completing all training and obtaining all certifications required by Franchisor). Franchisor will approve or disapprove of the replacement Manager within 30 days. Until such replacement is designated, Franchisee will provide for interim management of the Kidokinetics Business, who will act in accordance with the terms of this Agreement. Any failure to comply with the requirements of this Section is deemed an event of default under this Agreement.
- 10.3.2.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, if the franchisee is an entity, either the shareholder or member must devote their full-time attention and best efforts to managing the Kidokinetics business, or they can delegate the day-to-day operations to a manager. However, the franchisee cannot appoint a manager who is not the franchisee or a principal of the franchisee (if the franchisee is an entity) without the franchisor's approval. All requests to appoint a manager must be submitted in writing.
The appointed manager must meet Kidokinetics's standards and criteria, as detailed in the Franchise Operations Manual or in writing by the franchisor, and must be acceptable to the franchisor at their sole discretion. The manager is required to dedicate their full time and best efforts to supervising and managing the Kidokinetics business and cannot engage in any other business activities without the franchisor's consent. The manager must also satisfy the training requirements outlined in Article 6 of the franchise agreement.
If the Kidokinetics business is operated by a manager, a principal of the franchisee must still devote at least 20 hours of work per month to the operation of the franchised business. If the manager is unable to continue in their role or no longer qualifies, the franchisee must promptly notify Kidokinetics and request approval for a replacement within 30 days. The franchisor will then approve or disapprove the replacement manager within 30 days. Until a replacement is designated, the franchisee must provide interim management for the business, acting in accordance with the terms of the agreement. Failure to comply with these requirements is considered an event of default under the Franchise Agreement.