What items are excluded from compensation if Kidokinetics does not renew a franchise agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- (d) A provision that permits us to refuse to renew your Franchise without fairly compensating you by repurchase or other means for the fair market value at the time of expiration of your inventory, supplies, equipment, fixtures, and furnishings. Personalized materials which have no value to us and inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the Franchise business are not subject to compensation. This subsection applies only if: (i) the term of the Franchise is less than five years; and (ii) you are prohibited by the Franchise Agreement or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area subsequent to the expiration of the Franchise or you do not receive at least six months' advance notice of our intent not to renew the Franchise.
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, in Michigan, if Kidokinetics does not renew a franchise agreement, franchisees will not be compensated for personalized materials that have no value to Kidokinetics. Additionally, franchisees will not receive compensation for inventory, supplies, equipment, fixtures, and furnishings not reasonably required in the conduct of the franchise business.
This provision regarding non-renewal applies only if two conditions are met. First, the term of the franchise must be less than five years. Second, the franchisee must be prohibited by the Franchise Agreement or other agreement from continuing to conduct substantially the same business under another trademark, service mark, trade name, logotype, advertising, or other commercial symbol in the same area after the franchise expires. Alternatively, this section applies if the franchisee does not receive at least six months' advance notice of Kidokinetics's intent not to renew the Franchise.
This stipulation is specific to Michigan due to state laws governing franchise agreements. Franchisees in other states may have different terms regarding compensation upon non-renewal, so it's important to review the specific state addenda and the Franchise Agreement carefully. This ensures that franchisees understand their rights and potential compensation in the event of non-renewal.