What happens if a Kidokinetics franchisee fails to comply with the non-competition covenants?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
16.2.16. fails to comply with the non-competition covenants in Section 18.5;
16.5. Upon 30 Days' Notice to Cure.
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.
- 17.1.5. pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor for any violation of this Agreement and, subsequent to the termination or expiration of this Agreement, in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement that survive its termination;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, failure to comply with the non-competition covenants outlined in Section 18.5 of the franchise agreement constitutes a default. Specifically, section 16.2.16 states that a franchisee's failure to comply with these covenants is grounds for default.
When a franchisee defaults, Kidokinetics has the right to terminate the franchise agreement, as detailed in section 16.5. Kidokinetics must provide the franchisee with a 30-day notice to cure the default. If the franchisee fails to correct the non-compliance within this period, Kidokinetics can proceed with terminating the agreement.
In addition to termination, Kidokinetics retains the right to seek remedies for the violation of the agreement, including injunctive relief to enforce the non-competition covenants, as stated in section 17.1.5. This means Kidokinetics can pursue legal action to prevent the franchisee from engaging in activities that breach the non-compete terms. The franchisee is also responsible for covering all damages, costs, and expenses, including reasonable attorney's fees, incurred by Kidokinetics in obtaining these remedies.