What happens if a Kidokinetics franchisee fails to comply with laws applicable to the business operation?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
16.2.4. fails to comply with any federal, state or local law, rule or regulation, applicable to the operation of the Kidokinetics Business, including, but not limited to, the failure to pay taxes;
11.1.3. Comply with all applicable governmental laws, ordinances, rules and regulations, including prompt payment of taxes when due;
Franchisee agrees to comply with all applicable international, federal, state and local laws pertaining to the privacy of customer, employee, and transactional information ("Privacy Laws").
Franchisee agrees to research and proactively ensure that the Kidokinetics Business is in compliance with Privacy Laws, which may vary by location.
Franchisee also agrees to comply with Franchisor's standards and policies pertaining to Privacy Laws.
If there is a conflict between Franchisor's standards and policies pertaining to Privacy Laws and actual applicable law, Franchisee will: (i) comply with the requirements of applicable law; (ii) immediately give Franchisor written notice of said conflict; and (iii) promptly and fully cooperate with Franchisor and its counsel in determining the most effective way, if any, to meet Franchisee agrees not to publish, disseminate, implement, revise, or rescind a data privacy policy without Franchisor's prior written consent as to said policy.
Franchisee shall be deemed to be in default and Franchisor has the right to terminate this Agreement if Franchisee fails to perform or comply with any one or more of the terms or conditions of this Agreement or any ancillary agreements between Franchisee and Franchisor or Franchisor's affiliates and fails to cure such default after notice and expiration of the thirty (30)-day cure period.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, failure to comply with any federal, state, or local law, rule, or regulation applicable to the operation of the Kidokinetics business, including failure to pay taxes, constitutes a default under the franchise agreement. This means Kidokinetics can take action against the franchisee.
Kidokinetics requires franchisees to operate their businesses in compliance with all applicable governmental laws, ordinances, rules, and regulations, including the prompt payment of taxes when due. Franchisees must also research and proactively ensure that their Kidokinetics business complies with privacy laws, which may vary by location. Franchisees must comply with Kidokinetics's standards and policies pertaining to privacy laws. If there is a conflict between Kidokinetics's standards and policies and applicable law, the franchisee must comply with the law, notify Kidokinetics in writing, and cooperate with Kidokinetics to determine the most effective way to meet the legal requirements.
If a franchisee fails to comply with these legal and regulatory requirements, Kidokinetics has the right to terminate the franchise agreement. However, in many cases, Kidokinetics must provide the franchisee with written notice of the default and an opportunity to cure it. The cure period is typically 30 days, but it can be shorter (e.g., 5 or 15 days) depending on the specific default. If the franchisee fails to cure the default within the applicable cure period, Kidokinetics can terminate the franchise agreement and all rights granted to the franchisee. Franchisees should be diligent in understanding and adhering to all applicable laws and regulations to avoid potential defaults and termination of their franchise agreement.