Does this section of the Kidokinetics FDD specify any geographic limits related to the 'Approval of Requested Assignment'?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- c. The parties acknowledge and agree that each of the covenants contained herein are reasonable limitations as to time, geographical area, and scope of activity to be restrained, and do not impose a greater restraint than is necessary to protect the goodwill or other business interests of Franchisor.
- d. If the period of time or the geographic scope specified in Section 2.b. above should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable. In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, the approval of a requested assignment is subject to certain limitations, including geographic area. Specifically, the covenants within the franchise agreement include reasonable limitations as to time, geographical area, and scope of activity to protect Kidokinetics' goodwill and business interests. This suggests that any transfer of the franchise must adhere to these pre-defined geographic restrictions.
The Kidokinetics agreement states that these limitations are deemed reasonable to protect the franchisor's interests. However, if any court deems the geographic scope unreasonable, the agreement provides for a reduction in the geographic area to ensure enforceability. This flexibility allows Kidokinetics to adjust the restrictions to comply with legal standards while still safeguarding its business.
Kidokinetics retains the right to modify the scope of any covenant, including geographic limitations, without the franchisee's consent. This modification becomes effective immediately upon written notice to the franchisee, who must then comply with the adjusted terms. This clause provides Kidokinetics with significant control over the geographic boundaries within which a franchisee can operate, even after a transfer.