What is the scope of the Kidokinetics Guarantor's guarantee to the Franchisor regarding the Franchise Agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Each Principal and each Principal's spouse will personally execute and bind himself or herself to the Guaranty and Confidentiality and Non-Compete Agreement, in the forms of Attachments E and F to this Agreement, respectively.
Each shall jointly and severally guarantee Franchisee's performance of all of Franchisee's obligations, covenants and agreements under the Agreement, and otherwise bind themselves to the terms of this Agreement as stated herein, pursuant to the terms and conditions of the Guaranty and Confidentiality and Non-Compete Agreement.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, each principal and their spouse must personally execute a Guaranty and Confidentiality and Non-Compete Agreement. These individuals jointly and severally guarantee the franchisee's performance of all obligations, covenants, and agreements under the Franchise Agreement. They also bind themselves to the terms of the agreement as outlined in the Guaranty and Confidentiality and Non-Compete Agreement.
In simpler terms, this means that the personal assets of the franchisee's principals and their spouses are at risk if the Kidokinetics franchise fails to meet its financial or operational obligations. This is a common practice in franchising, as it provides the franchisor with additional security and recourse in case of franchisee default.
Prospective Kidokinetics franchisees should carefully review the Guaranty and Confidentiality and Non-Compete Agreement with legal counsel to fully understand the extent of their personal liability. They should also assess their financial situation and risk tolerance before signing the agreement, as the guarantee could have significant financial consequences.