If the Kidokinetics franchisee is a business entity, are all owners required to sign a Personal Guaranty?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
If you are a business entity, each owner must sign a Personal Guaranty. Spouses are required to sign a Personal Guaranty. The Personal Guaranty is attached to our Franchise Agreement as Attachment E.
Your Manager and all other managerial personnel who will have access to our proprietary and Confidential Information and training must sign our Non-Disclosure and Non-Compete Agreement, which is attached to our Franchise Agreement as Attachment F. Additionally, if you are a business entity, all of your officers, directors, and direct and indirect equity holders, and those of any business entity that directly or indirectly controls you must sign the Non-Disclosure and Non-Compete Agreement.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD page 39)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, if the franchisee is a business entity, each owner is required to sign a Personal Guaranty. Additionally, spouses are also required to sign a Personal Guaranty, which is included as Attachment E to the Franchise Agreement. This requirement ensures that all individuals with an ownership stake in the Kidokinetics franchise, as well as their spouses, are personally liable for the franchise's obligations.
This requirement has significant implications for prospective franchisees. It means that the personal assets of each owner and their spouse could be at risk if the Kidokinetics franchise fails to meet its financial or contractual obligations. This is a common practice in franchising, as it provides the franchisor with an additional layer of security and ensures that the owners are fully committed to the success of the business.
Furthermore, all officers, directors, and direct and indirect equity holders of the business entity, and those of any business entity that directly or indirectly controls the franchisee, must sign a Non-Disclosure and Non-Compete Agreement. This agreement, included as Attachment F to the Franchise Agreement, protects Kidokinetics's confidential information and prevents individuals associated with the franchise from competing with the brand during and after the franchise term. Franchisees should carefully review these requirements and understand the full extent of their personal liability before entering into a franchise agreement with Kidokinetics.