Does Section 15.6 provide an exception to the transfer restrictions for Kidokinetics franchisees?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.6.
Death or Permanent Disability.
Upon the death or permanent disability of Franchisee, the Franchise granted by this Agreement is descendible to any heir or other successor, provided the heir or successor is capable of fulfilling the requirements of the Franchise Agreement and agrees to sign a Personal Guaranty, a copy of which is attached to this Agreement as Attachment E, to guaranty the obligations of Franchisee within six months.
If the heir or successor is unwilling or unable, for example due to minority or other impairment, to comply with the obligations of this section, he or she may appoint a Manager, approved by Franchisor to operate the Kidokinetics Business.
If Franchisee's heir or successor does not wish to accept the obligations of the Franchise Agreement, he or she may transfer the Franchised Business in accordance with the obligations contained in this Article 15 of the Agreement within six months from the date of death or permanent disability, to a third party approved by Franchisor in writing.
A transfer under this Section 15.6 is subject to the conditions for Transfers in this Article 15.
Nothing contained herein is intended, nor will it, extend the term of the Franchise Agreement.
For purposes of this Agreement, the term "permanent disability" means a mental or physical disability, impairment or condition that is reasonably expected to prevent or actually does prevent such person from supervising the operation of Franchisee's Kidokinetics Business for six months from its onset.
Immediately after the death or permanent disability of such person, or while the Franchised Business is owned by an executor, administrator, guardian, personal representative or trustee of that person, the Kidokinetics Business shall be supervised by an interim successor manager satisfactory to Franchisor, pending appointment of an approved Manager or transfer of the Franchised Business to the deceased or disabled individual's lawful heirs or successors. If the executor, administrator, guardian, personal representative or trustee cannot or does not appoint an interim manager, Franchisor may provide interim on-site management of Franchisee's Kidokinetics Business, for which services Franchisee shall pay to Franchisor the Interim Management Fee. If Franchisee's heirs or successors do not appoint a Manager or transfer the Franchised Business within 180 days, the Franchise Agreement will automatically terminate, unless prohibited by law.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Section 15.6 addresses the transfer of the franchise upon the death or permanent disability of the franchisee. In such cases, the franchise is descendible to an heir or successor, provided they can fulfill the franchise agreement requirements and sign a Personal Guaranty within six months. If the heir or successor is unable or unwilling to take on these obligations, they can appoint a Franchisor-approved Manager to operate the Kidokinetics business.
Alternatively, the heir or successor may transfer the Kidokinetics business to a third party approved by Kidokinetics, within six months from the date of death or permanent disability. Any transfer under Section 15.6 remains subject to the general conditions for transfers outlined in Article 15 of the agreement. The FDD specifies that 'permanent disability' means a mental or physical condition that prevents the franchisee from supervising the Kidokinetics business for at least six months.
Following the death or permanent disability, an interim successor manager, satisfactory to Kidokinetics, must supervise the business until a permanent Manager is appointed or the business is transferred. If the executor, administrator, guardian, personal representative, or trustee does not appoint an interim manager, Kidokinetics may provide interim on-site management, for which the franchisee will pay an Interim Management Fee. If the heirs or successors fail to appoint a Manager or transfer the business within 180 days, the Franchise Agreement will automatically terminate, unless prohibited by law. It is important to note that Section 15.6 does not extend the original term of the Franchise Agreement.