Can Kidokinetics operate acquired businesses under any other marks?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor.
- 2.2. Reservation of Rights. Franchisee acknowledges and agrees that Franchisor and any parties Franchisor designates will have the right to: (i) establish and operate, and license third parties the right to establish and operate, other franchised businesses using the Marks and System at any location outside of the Territory; (ii) acquire, merge with, engage in joint ventures with, or otherwise affiliate with, and thereafter own and operate and franchise others the right to own and operate, any business of any kind, including businesses that offer products that are similar to those provided by a Franchised Business, within or outside the Territory; (iii) open and operate, or license third parties the right to open or operate, businesses that offer products and services similar to the Franchised Business under marks other than the Marks at any location; (iv) sell and distribute, directly or indirectly, or license others to sell and distribute, directly or indirectly, any products, services or merchandise, from any location or to any purchaser, through any channel or method of distribution (including, but not limited, to virtual classes, sales made by or through telemarketing, and/or on the Internet); (v) provide the services or sell products authorized for Kidokinetics Businesses to customers whose principal residence (or principal business office, if the customer is a business entity) is within Franchisee's Territory if contact with the customer is initiated by the customer and not Franchisor; (vi) to use and license the use of technology to non-franchisee locations inside and outside the Territory; and (vii) engage in any other activities not expressly prohibited under this Agreement.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics retains the right to acquire, merge, or affiliate with other businesses, including those offering similar products, and to operate or franchise these businesses under different marks, both within and outside a franchisee's territory. This means that Kidokinetics can operate businesses, even those competing with its franchisees, under brand names other than "KIDOKINETICS."
This reservation of rights allows Kidokinetics to diversify its offerings and expand its market presence without being restricted to the Kidokinetics brand alone. For a franchisee, this implies potential competition from businesses owned or affiliated with Kidokinetics that operate under different brands. These businesses could offer similar services or products, potentially impacting the franchisee's market share and revenue.
Furthermore, Kidokinetics can also license third parties to operate businesses offering similar products and services under marks other than the Kidokinetics marks. This broad right gives Kidokinetics significant flexibility in how it expands and manages its business, but it also introduces a competitive element for franchisees, as Kidokinetics is not restricted to only using the Kidokinetics brand for its or its licensees' operations. Franchisees should be aware that Kidokinetics's strategic decisions regarding acquisitions and partnerships could lead to increased competition in their market.