What happens if a Kidokinetics franchisee uses the Intellectual Property in a way that is not authorized?

According to Kidokinetics' 2024 Franchise Disclosure Document, any unauthorized use of the Intellectual Property by a franchisee constitutes an infringement of Kidokinetics' rights and is considered an event of default under the franchise agreement. The Intellectual Property includes the Marks, Copyrights, Know-how, and System.

Kidokinetics franchisees are explicitly prohibited from using the Marks as part of their corporate or legal name without prior approval from Kidokinetics. They must also identify themselves as independent franchisees in conjunction with any use of the Intellectual Property on items such as invoices, order forms, receipts, and contracts. Furthermore, franchisees cannot use the Intellectual Property to incur any obligations or indebtedness on behalf of Kidokinetics. Any merchandise using the Marks must receive written approval from Kidokinetics before being sold.

If a franchisee fails to comply with the agreement, it will cause substantial and irreparable damage to Kidokinetics and/or other Kidokinetics franchisees, for which there is no adequate remedy at law. Therefore, any violation of the agreement will entitle Kidokinetics to injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law. The franchisee's sole remedy, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the bond shall not exceed $1,000. None of the remedies available to Kidokinetics under this Agreement are exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance, and recovery of monetary damages.

These stipulations are fairly standard in franchising, as franchisors must protect their trademarks and brand identity. Prospective Kidokinetics franchisees should carefully review the sections of the franchise agreement pertaining to intellectual property and ensure they understand the permitted uses and restrictions. Failure to adhere to these terms can lead to default and potential legal action.