Does the franchisor's approval of a Kidokinetics franchise transfer constitute a waiver of any claims against the transferring party?

According to Kidokinetics's 2024 Franchise Disclosure Document, the franchisor's approval of a franchise transfer does not constitute a waiver of any claims it may have against the transferring franchisee or their principals. Kidokinetics retains the right to demand strict compliance with the franchise agreement from the transferee, regardless of the consent given for the transfer. This protects Kidokinetics's interests and ensures that it can pursue any existing claims against the transferring party, even after the transfer is approved.

This provision is important for prospective Kidokinetics franchisees to understand because it clarifies that transferring the franchise does not absolve them of any prior obligations or liabilities to the franchisor. Even if Kidokinetics approves the transfer, it can still pursue legal action or claims against the transferring franchisee for any breaches of the franchise agreement that occurred before the transfer. This could include unpaid fees, violations of operational standards, or any other contractual breaches.

For a franchisee considering selling their Kidokinetics business, this means they need to resolve any outstanding issues with the franchisor before initiating the transfer process. Failure to do so could result in ongoing liability even after the business has been sold. It is advisable to seek legal counsel to ensure all obligations are met and to negotiate a release of claims as part of the transfer agreement to avoid future disputes with Kidokinetics.