What happens to the non-compete obligations if a Kidokinetics franchise is transferred?

According to Kidokinetics' 2024 Franchise Disclosure Document, if a franchisee transfers their franchise, both the franchisee and their principals must continue to comply with the post-termination provisions of the agreement, which include non-disclosure and non-competition covenants. This means that even after selling the franchise, the original franchisee remains bound by the non-compete agreement.

Specifically, the franchisee (and their principals, if the franchisee is a partnership, corporation, or limited liability company) and their family members must adhere to the post-termination provisions outlined in the agreement. These provisions typically restrict the franchisee from engaging in similar businesses or activities that would compete with Kidokinetics within a specified geographic area and timeframe after the franchise is transferred.

This requirement ensures that the transfer of the franchise does not undermine Kidokinetics' competitive advantage or lead to the former franchisee using confidential information or business practices gained during their time with Kidokinetics to compete against the brand. The new franchisee will also be subject to a non-compete agreement as part of their franchise agreement with Kidokinetics.