What happens if a Kidokinetics franchisee uses the Intellectual Property in an unauthorized way?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that any unauthorized use of the Intellectual Property constitutes an infringement of Franchisor's or Licensor's rights in the Intellectual Property and an event of default hereunder.
Franchisee shall provide Franchisor or Licensor with all assignments, affidavits, documents, information and assistance Franchisor or Licensor reasonably requests to fully vest in Franchisor or Licensor all such rights, title and interest in and to the Intellectual Property, including all such items as are reasonably requested by Franchisor or Licensor to register, maintain and enforce such rights in the Intellectual Property.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, any unauthorized use of its Intellectual Property by a franchisee constitutes an infringement of Kidokinetics' rights and an event of default under the franchise agreement. This means Kidokinetics can take immediate action if a franchisee misuses logos, trademarks, or other proprietary materials.
Kidokinetics retains the right to seek legal remedies, including injunctive relief, to stop the unauthorized use. Injunctive relief is a court order that would require the franchisee to immediately cease the infringing activity. The FDD states that Kidokinetics can pursue this without needing to post a bond, though if a bond is required, it will not exceed $1,000.
In addition to injunctive relief, Kidokinetics can pursue other remedies available under the agreement, at law, or in equity. These include specific performance (forcing the franchisee to comply with the agreement) and recovery of monetary damages to compensate for any losses suffered due to the unauthorized use. The agreement specifies that these remedies are not exclusive and can be combined.
Furthermore, making unauthorized use of the Marks or other Intellectual Property is grounds for termination of the Kidokinetics franchise agreement. This could have significant financial and operational consequences for the franchisee, including loss of the business and associated revenue.