What are the restrictions on unfair competition after the relationship ends as a manager or officer of a Kidokinetics franchisee?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
You agree not to unfairly compete with us during the Restricted Period by engaging in any Prohibited Activities; provided, however, that the Prohibited Activity relating to having an interest in a Competitive Business will only apply with respect to a Competitive Business that is located within or provides competitive goods or services to customers who are located within the Restricted Territory.
If you engage in any Prohibited Activities during the Restricted Period, then you agree that your Restricted Period will be extended by the period of time during which you were engaging in the Prohibited Activity.
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).
"Prohibited Activities" means any or all of the following: (i) owning, operating, or having any other interest (as an owner, partner, director, officer, employee, manager, consultant, shareholder, creditor, representative, agent, or in any similar capacity) in a Competitive Business (other than owning an interest of five percent (5%) or less in a publicly-traded company that is a Competitive Business); (ii) diverting or attempting to divert any business from us (or one of our affiliates or franchisees); and/or (iii) inducing or attempting to induce any customer of ours (or of one of our affiliates or franchisees) to transfer their 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
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, if you are a manager or officer of a Kidokinetics franchisee, you are subject to certain restrictions on unfair competition after your relationship with the franchisee ends. Specifically, you agree not to unfairly compete with Kidokinetics during the Restricted Period by engaging in any Prohibited Activities. The Prohibited Activity relating to having an interest in a Competitive Business only applies with respect to a Competitive Business that is located within or provides competitive goods or services to customers who are located within the Restricted Territory.
The "Restricted Period" is defined as the 24-month period after you cease to be a manager or officer of the Kidokinetics franchisee. However, if a court determines that this 24-month period is too long to be enforceable, the Restricted Period will be a 12-month period. If you engage in any Prohibited Activities during the Restricted Period, the period will be extended by the amount of time you were engaging in the Prohibited Activity.
The "Restricted Territory" is the geographic area within a 20-mile radius of the perimeter of the Territory being granted or any other Territory licensed by Kidokinetics. If a court determines that the 20-mile radius is too broad to be enforceable, then the Restricted Territory will be a 10-mile radius from the Kidokinetics business, including the premises of the approved location of the Franchisee.
"Prohibited Activities" include: (i) owning, operating, or having any other interest in a Competitive Business (other than owning an interest of five percent (5%) or less in a publicly-traded company that is a Competitive Business); (ii) diverting or attempting to divert any business from Kidokinetics (or one of its affiliates or franchisees); and/or (iii) inducing or attempting to induce any customer of Kidokinetics (or of one of its affiliates or franchisees) to transfer their business to you or to any other person that is not then a franchisee of Kidokinetics.