Is Kidokinetics liable to the franchisee for expenses, losses, or damages resulting from modifications to the Marks?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee, upon notice by Franchisor, shall immediately discontinue the use of any Mark that is no longer available to Franchisor or that Franchisor has otherwise discontinued, and substitute a different Mark or Marks as Franchisor directs.
Franchisee will accept, use and display any such Trade Dress Modifications as if they were a part of this Franchise Agreement at the time of execution.
- 8.5. No Liability/Waiver of Claims.
Franchisor will not be liable to Franchisee for any expenses, losses or damages sustained by Franchisee as a result of any of the modifications, including Trade Dress Modifications, required by this Article 8.
Franchisee hereby covenants not to commence or join in any litigation or other proceeding against Franchisor or any third party, complaining of any such or seeking expenses, losses or damages caused thereby.
Further, Franchisee expressly waives any claims, demands or damages arising from or related to the modifications contemplated by this Article 8, including, without
Kidokinetics
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, Kidokinetics will not be liable to the franchisee for any expenses, losses, or damages resulting from modifications, including Trade Dress Modifications. The franchisee also agrees not to participate in any litigation against Kidokinetics or any third party regarding these modifications.
Kidokinetics retains the right to change and modify identifying elements of the System, including new vehicle wraps, color schemes, and modified marks, referred to as "Trade Dress Modifications." The franchisee is required to accept, use, and display these modifications as if they were part of the original Franchise Agreement.
Furthermore, the franchisee expressly waives any claims, demands, or damages related to these modifications, including claims of breach of contract, breach of fiduciary duty, fraud, and/or breach of the implied covenant of good faith and fair dealing. This comprehensive waiver protects Kidokinetics from liability related to required modifications to the Kidokinetics business's trade dress or branding.
This type of clause is not uncommon in franchise agreements, as franchisors need the flexibility to update their brand and standards. However, it places the financial burden of these changes entirely on the franchisee, which is a significant risk to consider. A prospective franchisee should carefully evaluate the potential costs of these modifications and factor them into their financial projections.