What is the purpose of the Franchisee's Personal Guaranty and Covenant for Kidokinetics?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
| This Franchisee's Personal Guaranty and Covenant (this "Guaranty") is given by each of the |
|---|
| undersigned (each, a "Guarantor") on [], 20 to Kidokinetics Franchise LLC, a Florida |
| limited liability company ("Franchisor"), in order to induce Franchisor to enter into that certain Franchisor |
| Agreement dated of even date herewith (the "Franchise Agreement") with, |
| a("Franchisee"). |
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, the Franchisee's Personal Guaranty and Covenant is required by Kidokinetics Franchise LLC to induce them to enter into a Franchise Agreement with the franchisee. This means that the franchisor wants assurance that the franchisee will fulfill their obligations under the agreement, and the guaranty provides an additional layer of security.
The document also states that each Principal and each Principal's spouse will personally execute and bind himself or herself to the Guaranty and Confidentiality and Non-Compete Agreement. This indicates that if the franchisee is a business entity (like a corporation or LLC), the individuals who own or control the entity (the Principals) must also personally guarantee the franchisee's obligations. This is a common practice in franchising, as it ensures that individuals with a vested interest in the business are personally liable for its performance.
Furthermore, the covenant includes agreements related to non-competition and confidentiality. During the term of the agreement, the franchisee and principals must not engage in any activities that could harm the Kidokinetics business or system, such as diverting customers or participating in competing businesses. After the agreement terminates, these restrictions continue for a period of time (24 months), within a certain radius (20 miles). These covenants protect Kidokinetics's interests by preventing franchisees from using the franchisor's confidential information or competing against the system after leaving it.