Is franchisor approval required for a Kidokinetics franchisee to appoint a manager who is not the franchisee or a principal?
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.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee needs franchisor approval to appoint a manager who is not the franchisee or a principal of the franchisee entity. The franchisee must submit a written request for approval. The prospective 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 Kidokinetics at its sole discretion.
The approved manager must dedicate their full time and best efforts to supervising and managing the Kidokinetics business and cannot engage in other business activities without the franchisor's consent, which Kidokinetics can withhold. The manager must also fulfill the training requirements outlined in Article 6 of the franchise agreement.
If the Kidokinetics business is run by a manager, a principal of the franchisee must still dedicate at least 20 hours per month to the business's operation. If a manager can no longer fulfill their duties or no longer qualifies, the franchisee must inform Kidokinetics immediately and seek approval for a replacement within 30 days, with the replacement being subject to the same qualifications. Kidokinetics will then approve or disapprove of the replacement manager within 30 days. Failure to comply with these requirements is considered a default under the Franchise Agreement.