In Michigan, can Kidokinetics require a franchisee to resell items not uniquely identified with Kidokinetics?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- (h) A provision that requires you to resell to us items that are not uniquely identified with us. This subdivision does not prohibit a provision that grants to us a right of first refusal to purchase the assets of a Franchise on the same terms and conditions as a bona fide third party willing and able to purchase those assets, nor does this subdivision prohibit a provision that grants us the right to acquire the assets of a Franchise for the market or appraised value of such assets if you have breached the lawful provisions of the Franchise Agreement and have failed to cure the breach in the manner provided in subdivision (c).
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, Michigan law includes specific protections for franchisees. It states that certain provisions that are sometimes included in franchise documents are void and unenforceable in Michigan.
Specifically, Kidokinetics cannot enforce a provision that requires a franchisee to resell items to them that are not uniquely identified with Kidokinetics. However, this does not prevent Kidokinetics from having a right of first refusal to purchase the assets of a franchise on the same terms as a third party. Also, Kidokinetics retains the right to acquire the assets of a franchise for market or appraised value if the franchisee has breached the Franchise Agreement and failed to cure the breach.
This protection ensures that Kidokinetics franchisees in Michigan are not unfairly compelled to buy back non-branded items, while still allowing Kidokinetics to protect its interests in cases of transfer or breach of contract.