In New York, on what grounds can I terminate the Kidokinetics franchise agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687(4) and 687(5) be satisfied.
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- The following language replaces the "Summary" section of Item 17(d), titled "Termination by franchisee": You may terminate the agreement on any grounds available by law.
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- The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum." and Item 17(w), titled "Choice of law":
The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or the franchisee by Article 33 of the General Business Law of the
State of New York.
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- Franchise Questionnaires and Acknowledgements No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
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- Receipts Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earlier of the first personal meeting, ten (10) business days before the execution of the franchise or other agreement, or the payment of any consideration that relates to the franchise relationship.
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, franchisees in New York have specific rights regarding the termination of the franchise agreement. The FDD states that a franchisee may terminate the agreement on any grounds available by law. This means that the standard termination clauses within the Kidokinetics franchise agreement are supplemented by the legal rights and protections afforded to franchisees under New York law.
This provision is particularly important because it prevents Kidokinetics from unduly restricting a franchisee's ability to terminate the agreement under circumstances where New York law provides a legal basis for doing so. This could include situations where Kidokinetics has breached the agreement, engaged in fraudulent behavior, or violated state franchise laws. The FDD also clarifies that the choice of law specified in the franchise agreement does not waive any rights conferred upon the franchisee by Article 33 of the General Business Law of the State of New York.
Furthermore, any statements, questionnaires, or acknowledgments signed by the franchisee cannot waive claims under state franchise law, including claims of fraud in the inducement, or disclaim reliance on statements made by Kidokinetics. This ensures that franchisees are not inadvertently giving up their legal rights through standard paperwork associated with the franchise agreement. This protection extends to ensuring compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which mandates a specific timeframe for providing the Franchise Disclosure Document to prospective franchisees before a sale can be finalized.