Does this section of the Kidokinetics FDD outline any prohibited actions related to the 'Approval of Requested Assignment'?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.3.7.
Franchisor has granted written approval of the material terms and conditions of the Transfer, including, without limitation, that the price and terms of payment will not adversely affect the Kidokinetics Business's operation.
However, Franchisor's approval of a Transfer is not in any way a representation or warranty of the transferee's success or the soundness of transferee's decision to purchase the Franchise on such terms and conditions.
Franchisee shall provide Franchisor all proposed transfer documents for Franchisor's review at least 30 days prior to a closing of the proposed Transfer;
- 15.3.8.
If Franchisee or any Principal finances any part of the sale price of the Transfer, Franchisee or its Principal have agreed that all obligations of the transferee under any notes, agreements or security interests to Franchisee or its Principal will be subordinate to the transferee's obligations to Franchisor and subject to all limitations of Section 15.8 below;
- 15.3.9.
Franchisee must cure all existing defaults under this Agreement, or any other agreement between Franchisee and Franchisor, Franchisor's affiliates, Franchisor's designated/approved suppliers and vendors, within the period permitted for cure and have substantially complied with such agreements during their respective terms;
- 15.3.10.
Franchisee or transferee will provide Franchisor a copy of the executed purchase agreement relating to the proposed transfer with all supporting documents and schedules, including transferee's assumption of an agreement to faithfully perform all of Franchisee's obligations under this Agreement;
- 15.3.11.
Franchisee (and Franchisee's principals if Franchisee is a partnership, corporation or limited liability company), and the members of their respective families must comply with the post-termination provisions of this Agreement;
- 15.3.12.
The transferee must obtain, within the time limits set by Franchisor, and maintain thereafter, all permits and licenses required for the operation of the Kidokinetics Business;
- 15.3.13.
Franchisee must request that Franchisor provide the prospective transferee with Franchisor's current form of franchise disclosure document, and Franchisor will not be liable for any representations not included in the franchise disclosure document;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, several actions could impede the approval of a requested assignment. Specifically, the franchisor's approval hinges on various conditions related to the transfer of the franchise. These conditions ensure that the transfer does not negatively impact the Kidokinetics business and that all obligations to the franchisor are met.
Kidokinetics requires that the franchisor grants written approval of the material terms and conditions of the transfer, ensuring that the price and terms of payment do not adversely affect the Kidokinetics Business's operation. Franchisee must provide all proposed transfer documents for the Franchisor's review at least 30 days prior to the closing of the proposed Transfer. If the Franchisee or any Principal finances any part of the sale price of the Transfer, Franchisee or its Principal have agreed that all obligations of the transferee under any notes, agreements or security interests to Franchisee or its Principal will be subordinate to the transferee's obligations to Franchisor.
Furthermore, the franchisee must address any existing defaults under their agreements with Kidokinetics, its affiliates, or approved suppliers and vendors. The franchisee and their principals must also adhere to the post-termination provisions outlined in the agreement. The transferee is required to obtain and maintain all necessary permits and licenses for operating the Kidokinetics business. Finally, the franchisee must ensure that the franchisor provides the prospective transferee with the current franchise disclosure document, highlighting that Kidokinetics is not liable for any representations outside of this document. These stipulations collectively define actions that, if not properly addressed, could prohibit the approval of a requested assignment.