Is a Kidokinetics franchisee's spouse subject to the non-competition covenants during the term of the franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Provision | Section In the Franchise or Other Agreement | Summary | |
|---|---|---|---|
| q. | Non-competition covenants during the term of the franchise | Section 18.5.1 | You, each principal, and your and your principals' spouses shall not, either directly or indirectly, for themselves or through, on behalf of, or in conjunction with, any person or entity: (i) divert, or attempt to divert, any business or customer of the Kidokinetics Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any children's sports or fitness business or any other business offering any other goods or services offered or authorized for sale by System franchisees ("Competing Business"); (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize our business or the business of any Kidokinetics franchisees (Subject to applicable state law). |
| r. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the franchisee's spouse is subject to the non-competition covenants during the term of the franchise agreement. Specifically, the franchisee, each principal, and their spouses are restricted from engaging in activities that could harm the Kidokinetics business or system.
During the franchise term, these individuals are prohibited from diverting business or customers to competitors, participating in any capacity in a competing children's sports or fitness business, performing any act that injures the goodwill associated with the Kidokinetics brand, or interfering with the business of Kidokinetics or its franchisees. These restrictions aim to protect the Kidokinetics system and maintain its competitive advantage.
This is a fairly standard practice in franchising, as franchisors typically want to ensure that all parties with a close connection to the franchisee are committed to the success of the franchise and do not engage in activities that could undermine it. Prospective Kidokinetics franchisees should carefully review Section 18.5.1 of the Franchise Agreement to fully understand the scope and implications of these non-competition covenants for themselves and their spouses.