What is the 'Restricted Period' during which a former manager or officer of a Kidokinetics franchisee is prohibited from unfair competition?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ir business to you or to any other person that is not then a franchisee of ours.
- "Restricted Period" means the 24 months-year period after you cease to be a manager or officer of Franchisee's Kidokinetics business; provided, however, that if a court of competent jurisdiction determines that this period of time is too long to be enforceable, then the "Restricted Period" means the
12 months-year period after you cease to be a manager or officer of Franchisee's Kidokinetics business.
"Restricted Territory" means the geographic area within: (i) a twenty (20) mile radius of the perimeter of (a) the Territory being granted hereunder, or (b) any other Territory licensed by Franchisor as of the date of expiration or termination of this Agreement; provided, however, that if a court of competent jurisdiction determines that the foregoing Restricted Territory is too broad to be enforceable, then the "Restricted Territory" means the geographic area within a 10-mile radius from Franchisee's Kidokinetics business (and including the premises of the approved location of Franchisee).
"System" means our system for the establishment, development, operation, and management of a Kidokinetics business, including Know-how, proprietary programs and products, Manual, and operating system.
- 2. Background. You are a manager or officer of Franchisee. As a result of this relationship, you may gain knowledge of our System. You understand that protecting the Intellectual Property and our System are vital to our success and that of our franchisees and that you could seriously jeopardize our entire System if you were to unfairly compete with us. In order to avoid such damage, you agree to comply with the terms of this Agreement.
-
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the "Restricted Period" is defined as the 24-month period following the cessation of one's role as a manager or officer for a Kidokinetics franchise. During this time, the former manager or officer is restricted from engaging in activities that unfairly compete with Kidokinetics. However, if a court deems this 24-month period too long to be enforceable, the restricted period will be reduced to 12 months.
This non-compete agreement is designed to protect Kidokinetics' interests by preventing former managers or officers from leveraging their knowledge of the Kidokinetics system to unfairly compete with the franchise. The agreement specifies that if the individual engages in prohibited activities during the restricted period, that period will be extended by the duration of the prohibited activity. This clause ensures that Kidokinetics can enforce the non-compete agreement effectively.
It is important to note that the restriction on having an interest in a competitive business only applies to businesses located within or providing goods or services to customers within the "Restricted Territory." The "Restricted Territory" is defined as a 20-mile radius around the franchise's territory or any other territory licensed by Kidokinetics. If a court finds this territory too broad, it will be reduced to a 10-mile radius from the Kidokinetics business. This ensures the non-compete is reasonable and enforceable.
Prospective franchisees should carefully consider these restrictions, as they could impact their future career options if they decide to leave the Kidokinetics system. It is advisable to seek legal counsel to fully understand the implications of these non-compete clauses before signing the franchise agreement.