What are the requirements for a Manager at a Kidokinetics franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
greement.
- 10.3. Appointment of Manager. Franchisee, or its shareholder or member if Franchisee is an entity, must devote his/her full-time attention and best efforts to the management and operation of the Franchised Business,
or may delegate the day-to-day operations of the Franchised Business to a manager ("Manager"). Franchisee may not appoint a Manager who is not the Franchisee or Principal of the Franchisee, if an entity, without the approval of Franchisor. All requests regarding appointment of a Manager must be in writing. The Manager shall meet Franchisor's standards and criteria, as set forth in the Franchise Operations Manual or otherwise in writing by Franchisor, and will be an individual otherwise acceptable to Franchisor in its sole discretion. The Manager will devote his or her full time and best efforts to the supervision and management of the Kidokinetics Business, and may not engage in any other business activity without the Franchisor's consent, which may be withheld in Franchisor's sole discretion. The Manager will satisfy the training requirements set forth in Article 6. If the Franchised Business is operated by a Manager, then a Principal of Franchisee must devote at least 20 hours of work per month to the operation of the Franchised Business.
- 10.3.1. If the Manager is not able to continue to serve in such capacity, or no longer qualifies to act as such in accordance with this Agreement, Franchisee will promptly notify Franchisor and request approval for a replacement within 30 days after the Manager ceases to serve, such replacement being subject to the same qualifications required by this Agreement (including, but not limited to, completing all training and obtaining all certifications required by Franchisor). Franchisor will approve or disapprove of the replacement Manager within 30 days. Until such replacement is designated, Franchisee will provide for interim management of the Kidokinetics Business, who will act in accordance with the terms of this Agreement. Any failure to comply with the requirements of this Section is deemed an event of default under this Agreement.
- 10.3.2. Franchisor, in Franchisor's sole discretion, may provide interim management support and charge Franchisee an interim management support fee ("Interim Management Fee") until such Manager is properly trained or certified in accordance with Franchisor's requirements. The Interim Management Fee will be in the amount of 10% percent of Gross Sales earned during the interim management period plus the subsequent three weeks, payable in addition to all regularly occurring fees including Royalty and Brand Development Fund Contributions, plus any and all costs of travel, lodging, meals and other expenses reasonably incurred by Franchisor, and be withdrawn from Franchisee's designated bank account.
- 10.4. Legal Compliance.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee can delegate the day-to-day operations to a manager, but only with the franchisor's approval if the manager is not the franchisee or a principal of the franchisee. Any request to appoint a manager has to be submitted in writing. The manager has to meet Kidokinetics's standards and criteria, as detailed in the Franchise Operations Manual or in writing by Kidokinetics, and must be acceptable to Kidokinetics at their discretion.
The manager is required to dedicate their full time and best efforts to supervising and managing the Kidokinetics business and cannot participate in any other business activities without Kidokinetics's consent. The manager also needs to fulfill the training requirements outlined in Article 6 of the agreement. If a manager is running the franchised business, a principal of the franchisee must still dedicate at least 20 hours per month to the business's operations.
If a manager can't continue in their role or no longer qualifies, the franchisee must inform Kidokinetics promptly and seek approval for a replacement within 30 days, with the replacement also meeting the same qualifications, including completing all required training and certifications. Kidokinetics has 30 days to approve or disapprove of the replacement manager. Until a replacement is found, the franchisee needs to provide interim management that adheres to the terms of the agreement. Failure to meet these requirements is considered a default under the agreement.
Kidokinetics may offer interim management support at its discretion and charge the franchisee an interim management support fee until a manager is properly trained or certified. This fee is 10% of gross sales during the interim management period and the subsequent three weeks, in addition to regular fees like royalty and brand development fund contributions, plus any travel, lodging, meals, and other expenses incurred by Kidokinetics. This amount will be withdrawn from the franchisee's bank account.