Does Kidokinetics have a lien against the franchisee's property for unpaid sums after termination?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.1.4. promptly pay all sums owing to Franchisor and its affiliates. Such sums will include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation gives rise to and remains until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, fixtures and vehicles owned by Franchisee and used in the operation of the Kidokinetics Business at the time of default;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, if a franchisee fails to pay all sums owed to Kidokinetics and its affiliates, Kidokinetics has a lien against the franchisee's property. This includes damages, costs, and expenses, including reasonable attorneys' fees, incurred by Kidokinetics due to the franchisee's default.
This lien applies to the franchisee's personal property, furnishings, equipment, fixtures, and vehicles used in the operation of the Kidokinetics business at the time of default. The lien remains in effect until all outstanding amounts are paid in full.
This means that Kidokinetics can legally claim the franchisee's business assets to cover unpaid debts. Prospective franchisees should understand this financial obligation and ensure they have a plan to meet all payment obligations to avoid the risk of losing business assets.