As a manager or officer of a Kidokinetics franchisee, what is my responsibility regarding the protection of Kidokinetics' intellectual property and system?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
uding Know-how, proprietary programs and products, Manual, and operating system.
- 2. Background. You are a manager or officer of Franchisee. As a result of this relationship, you may gain knowledge of our System. You understand that protecting the Intellectual Property and our System are vital to our success and that of our franchisees and that you could seriously jeopardize our entire System if you were to unfairly compete with us. In order to avoid such damage, you agree to comply with the terms of this Agreement.
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- Know-How and Intellectual Property. You agree: (i) you will not use the Know-how in any business or capacity other than the Kidokinetics business operated by Franchisee; (ii) you will maintain the confidentiality of the Know-how at all times; (iii) you will not make unauthorized copies of documents containing any Know-how; (iv) you will take such reasonable steps as we may ask of you from time to time to prevent unauthorized use or disclosure of the Know-how; and (v) you will stop using the Know-how immediately if you are no longer a manager or officer of Franchisee's Kidokinetics business. You further agree that you will not use all or part of the Intellectual Property or all or part of the System for any purpose other than the performance of your duties for Franchisee and within the scope of your employment or other engagement with Franchisee. These restrictions on Know-how, Intellectual Property and the System shall not apply to any information which is information publicly known or becomes lawfully known in the public domain other than through a breach of this Agreement or is required or compelled by law to be disclosed, provided that you will give reasonable notice to us to allow us to seek protective or other court orders.
- 4. Unfair Competition During Relationship. You agree not to unfairly compete with us at any time while you are a manager or officer of Franchisee's Kidokinetics business by engaging in any Prohibited Activities.
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- Unfair Competition After Relationship. You agree not to unfairly compete with us during the Restricted Period by engaging in any Prohibited Activities; provided, however, that the Prohibited Activity relating to having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within or provides competitive goods or services to customers who are located within the Restricted Territory. If you engage in any Prohibited Activities during the Restricted Period, then you agree that your Restricted Period will be extended by the period of time during which you were engaging in the Prohibited Activity.
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- Immediate Family Members. You acknowledge that you could circumvent the purpose of this Agreement by disclosing Know-how to an immediate family member (i.e., spouse, parent, sibling, child, grandparent or grandchild). You also acknowledge that it would be difficult for us to prove whether you disclosed the Know-how to family members. Therefore, you agree that you will be presumed to have violated the terms of this Agreement if any member of your immediate family: (i) engages in any Prohibited Activities during any period of time during which you are prohibited from engaging in the
Prohibited Activities; or (ii) uses or discloses the Know-how. However, you may rebut this presumption by furnishing evidence conclusively showing that you did not disclose the Know-how to the family member.
- 7. Covenants Reasonable. You acknowledge and agree that: (i) the terms of this Agreement are reasonable both in time and in scope of geographic area; and (ii) you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. YOU HEREBY WAIVE ANY RIGHT TO CHALLENGE THE TERMS OF THIS AGREEMENT AS BEING OVERLY BROAD, UNREASONABLE, OR OTHERWISE UNENFORCEABLE.
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- Breach. You agree that failure to comply with the terms of this Agreement will cause substantial and irreparable damage to us and/or other Kidokinetics franchisees for which there is no adequate remedy at law. Therefore, you agree that any violation of the terms of this Agreement will entitle us to injunctive relief. You agree that we may apply for such injunctive relief without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours in the event of the entry of such injunction will be the dissolution of such injunction, if warranted, upon hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the bond shall not exceed $1,000. None of the remedies available to us under this Agreement are exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance, and recovery of monetary damages. Any claim, defense, or cause of action that you may have against us, our owners or our affiliates, or against Franchisee, regardless of cause or origin, cannot be used as a defense against our enforcement of this Agreement.
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Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, as a manager or officer of a Kidokinetics franchisee, you have specific responsibilities regarding the protection of Kidokinetics' intellectual property and system. Kidokinetics considers the protection of its intellectual property and system vital to the success of its franchisees. As a manager or officer, gaining knowledge of the Kidokinetics system means you must comply with the terms outlined in the System Protection Agreement. This agreement aims to prevent any actions that could jeopardize the Kidokinetics system.
You are prohibited from using the Know-how, which includes trade secrets and proprietary information, in any business or capacity other than the Kidokinetics business operated by the franchisee. You must maintain the confidentiality of the Know-how at all times and avoid making unauthorized copies of any documents containing this information. Furthermore, you are required to take reasonable steps to prevent unauthorized use or disclosure of the Know-how, and you must cease using it immediately if you are no longer a manager or officer of the Kidokinetics franchise. You also cannot use the Intellectual Property or System for purposes outside your duties for the franchisee.
During your time as a manager or officer, you must not unfairly compete with Kidokinetics by engaging in any Prohibited Activities, which include owning or having an interest in a Competitive Business, diverting business from Kidokinetics, or inducing customers to transfer their business away from Kidokinetics. Even after you cease to be a manager or officer, these restrictions continue for a Restricted Period, which is 24 months, within a Restricted Territory, generally a 20-mile radius. Breaching these terms can extend the Restricted Period by the duration of the prohibited activity. These restrictions do not apply to information that is publicly known or legally disclosed, provided that Kidokinetics receives reasonable notice to seek protective orders.
Moreover, the franchisee must not take any action that would prejudice or interfere with the validity of Kidokinetics' rights to its Intellectual Property. The franchisee acknowledges that any goodwill arising from the use of the Intellectual Property and System benefits Kidokinetics exclusively. Unauthorized use of the Intellectual Property constitutes an infringement of Kidokinetics' rights and an event of default under the agreement. The franchisee must assist Kidokinetics in protecting its Intellectual Property by providing necessary documents and information. The franchisee must also identify itself as an independent Kidokinetics franchisee in conjunction with any use of the Intellectual Property and must obtain Kidokinetics' approval for any merchandise utilizing the Marks before selling it.