What happens if a Kidokinetics franchisee fails to maintain the required computer systems?

According to Kidokinetics' 2024 Franchise Disclosure Document, franchisees are required to install and maintain specific computer systems that comply with Kidokinetics' standards. These systems include an office computer, a tablet computer, a telephone, a fax machine, and a smartphone. Additionally, franchisees must use designated management software, and potentially a custom point-of-sale (POS) system if Kidokinetics implements one in the future. They also need to maintain printers, peripheral hardware, archival back-up systems, specified internet access, and security systems.

Kidokinetics may also require franchisees to install systems that allow Kidokinetics to electronically access and retrieve any information stored in the franchisee's management software and other computer systems, including gross sales data. Franchisees must provide Kidokinetics with full access usernames, temporary passwords, access codes, and IP addresses to facilitate this access. There are no contractual limitations on Kidokinetics' right to access this information.

If a Kidokinetics franchisee fails to maintain the strict quality controls reasonably required by the Franchise Agreement and/or the Franchise Operations Manual, this constitutes a default. In such cases, Kidokinetics will provide the franchisee with 15 days' written notice to cure the default. If the franchisee does not rectify the issue within this period, Kidokinetics has the option to terminate the Franchise Agreement. This underscores the importance of adhering to Kidokinetics' technology standards to avoid potential business disruption and franchise termination.