What happens if a Kidokinetics franchisee violates the Franchise Agreement by purchasing unapproved products or from unapproved suppliers?
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, if a franchisee violates the Franchise Agreement by purchasing unapproved products or sourcing from unapproved suppliers, Kidokinetics has the right to terminate the Franchise Agreement, among other potential remedies. This stipulation underscores the importance of adhering to Kidokinetics's approved supplier network to maintain compliance with the agreement.
Kidokinetics requires franchisees to operate their businesses according to a specific system and set of standards. This includes purchasing or leasing various products, services, supplies, equipment, and software from designated sources, which may include Kidokinetics itself, its affiliates, or approved suppliers. Franchisees must not deviate from these standards without prior written consent from Kidokinetics, ensuring uniformity and quality control across all franchise locations.
To ensure compliance, Kidokinetics provides franchisees with a list of approved suppliers and the items they are authorized to supply. This information is typically found in the Franchise Operations Manual, which also outlines the standards, specifications, and guidelines for all required products and services. Kidokinetics may modify these standards and guidelines periodically, communicating any changes through amendments to the manual or other written communication methods, including electronic communication.
If a franchisee wishes to use a product, service, or supplier that has not been pre-approved, they must submit sufficient information, specifications, or samples to Kidokinetics for evaluation. The franchisee is responsible for reimbursing Kidokinetics for any reasonable expenses incurred during the approval process. Kidokinetics will then determine whether the item, service, or supplier meets their standards and criteria, typically making a decision within 30 days. However, Kidokinetics retains the right to withdraw approval at a later date based on factors such as supplier performance or changes in specifications.