What is the Kidokinetics franchisee's obligation regarding covenants for their Manager and management level personnel?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
y and Confidentiality and Non-Compete Agreement.
- 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 a franchisee chooses to appoint a manager to oversee the day-to-day operations, the manager must meet Kidokinetics's standards and criteria, as detailed in the Franchise Operations Manual or in writing by Kidokinetics. The manager must also be acceptable to Kidokinetics, which retains sole discretion in this matter. The appointed manager is required to dedicate their full-time efforts to supervising and managing the Kidokinetics business and is prohibited from engaging in any other business activities without prior consent from Kidokinetics. Additionally, the manager must fulfill the training requirements outlined in Article 6 of the franchise agreement.
If the Kidokinetics franchisee opts to have a manager, a Principal of the Franchisee must still dedicate a minimum of 20 hours per month to the operation of the franchised business. This ensures that even with a manager in place, the franchisee's leadership remains actively involved in the business.
Furthermore, in connection with their duties, the manager will have access to confidential information, knowledge, know-how, techniques, contents of the Kidokinetics operations manual and other materials used in or related to the Kidokinetics system. The franchisee must ensure that the manager agrees to protect this information and the system against unfair competition by signing a Confidentiality and Non-Compete Agreement.