What happens if a Kidokinetics franchisee fails to meet the Minimum Performance Requirement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
16.2.22. fails to meet the Minimum Performance Requirement.
16.3. Upon 5 Days' Notice to Cure.
Franchisee will be deemed to be in default and Franchisor may, at its option, terminate this Agreement and all rights granted hereunder, if Franchisee fails to cure the default within the time period set forth in this Section 16.3, effective immediately upon notice to Franchisee, if Franchisee, or any Principal, as the case may be: fails to pay when due any amounts due to Franchisor under this Agreement or any related agreement and does not correct the failure within five calendar days after written notice; provided, however, Franchisor has no obligation to give written notice of a late payment more than two times in any 12 month period, and the third such late payment in any 12 month period is a non-curable default under Section 16.2.19.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, failing to meet the Minimum Performance Requirement constitutes a default of the Franchise Agreement. If a Kidokinetics franchisee fails to meet this requirement, Kidokinetics may issue a notice to cure.
Specifically, Kidokinetics will provide the franchisee with 5 days' notice to correct the failure to meet the Minimum Performance Requirement. If the franchisee does not cure the default within this 5-day period, Kidokinetics has the option to terminate the Franchise Agreement and all rights granted to the franchisee under the agreement. This termination is effective immediately upon notice to the franchisee.
This means that a Kidokinetics franchisee needs to carefully monitor their performance and take proactive steps to meet the Minimum Performance Requirement to avoid the risk of having their franchise agreement terminated. Franchisees should seek clarification from Kidokinetics regarding how the Minimum Performance Requirement is calculated and what specific actions can be taken to improve performance and avoid default.