For Kidokinetics franchises in Indiana, what is the duration and scope of the non-compete agreement after termination or expiration?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
us to require you to agree to a prospective general release of claims subject to the Indiana Deceptive Franchise Practices Act.
The "Summary" column in Item 17.r. of the FDD is deleted and the following is inserted in its place:
No competing business for two years within the Territory.
The "Summary" column in Item 17.t.
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Indiana franchisees are subject to a modified non-compete agreement. Specifically, the standard covenant not to compete is modified to comply with Indiana Code 23-2-2.7-1 (9). The FDD states that franchisees in Indiana are restricted from operating a competing business for two years within their territory.
This means that after the franchise agreement expires or is terminated, a Kidokinetics franchisee in Indiana cannot engage in a similar business within the defined territory for a period of two years. This restriction is designed to protect Kidokinetics's market share and confidential business information.
However, the modification to comply with Indiana law suggests that the enforceability and specific terms of the non-compete may be subject to legal interpretation and challenges under Indiana law. Prospective franchisees should carefully review Indiana Code 23-2-2.7-1 (9) and consult with legal counsel to fully understand the implications and limitations of the non-compete agreement in Indiana.