What happens if a Kidokinetics franchisee does not obtain the insurance coverage required under the Franchise Agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
We do not provide material benefits to you (such as renewal rights or the right to open additional Kidokinetics Businesses) based on whether or not you purchase through the sources we designate or approve; however, purchases of unapproved products or from unapproved suppliers in violation of the Franchise Agreement will entitle us to, among other things, terminate the Franchise Agreement.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–24)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees must secure specific insurance coverage. While the document details the required insurance types and amounts, it does not explicitly state the consequences if a franchisee fails to obtain the mandated insurance coverage. The FDD does state that purchases of unapproved products or from unapproved suppliers in violation of the Franchise Agreement will entitle Kidokinetics to, among other things, terminate the Franchise Agreement.
Given the lack of specific information regarding failure to obtain insurance, it is important for a prospective Kidokinetics franchisee to understand the potential ramifications of non-compliance.
To gain clarity, a potential franchisee should directly ask Kidokinetics about the specific actions the company might take if a franchisee does not maintain the required insurance. This inquiry should cover whether failure to maintain coverage constitutes a breach of the Franchise Agreement and what steps Kidokinetics would take to address such a breach, including potential termination of the agreement.