Is the Kidokinetics franchisee's skill 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. If Franchisee has complied fully with this Agreement, Franchisor will not unreasonably withhold its consent of a Transfer that meets the following requirements:
- 15.3.1. The proposed transferee must be an individual of good moral character or the principals of the transferee must all be of good moral character and otherwise meet Franchisor's then-applicable standards for franchisees;
- 15.3.2. The transferee must have sufficient business experience, aptitude and financial resources to operate the Kidokinetics Business and to comply with this Agreement;
- 15.3.3. The transferee and its or their Manager have agreed to complete Franchisor's Initial Management Training Program to Franchisor's satisfaction;
- 15.3.4. Franchisee has paid all amounts owed to Franchisor and third-party creditors;
- 15.3.5.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the franchisee's skills are a factor in the agreement. Kidokinetics states that the agreement is based on their perception of the franchisee's individual character, skills, aptitude, attitude, business ability, and financial capacity. This suggests that Kidokinetics carefully evaluates potential franchisees based on these qualities before entering into a franchise agreement.
Kidokinetics requires that if a franchisee wishes to transfer their rights and duties under the agreement to someone else, the proposed transferee must also meet Kidokinetics's standards for franchisees. Specifically, the 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 and meet Kidokinetics's then-applicable standards for franchisees. This indicates that Kidokinetics wants to ensure that anyone operating a franchise within their system possesses the necessary skills and character traits to uphold the brand's reputation and operational standards.
Furthermore, the FDD states that franchisees must ensure their employees maintain a neat and clean appearance and provide competent and courteous service. Kidokinetics emphasizes that poorly trained employees, sloppy appearances, and discourteous service can significantly damage the goodwill of the Kidokinetics system and brand. This highlights the importance Kidokinetics places on the skills and performance of the franchisee's staff in maintaining the brand's image and customer satisfaction.