Does this section of the Kidokinetics FDD specify any required actions related to the 'Approval of Requested Assignment'?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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EXHIBIT H-5
KIDOKINETICS FRANCHISE
SAMPLE APPROVAL OF REQUESTED ASSIGNMENT
| This Approval of Requested Assignment ("Agreement") is entered into this day of, 20, between Kidokinetics Franchise LLC ("Franchisor"), a |
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| Florida limited liability company, ("Former Franchisee"), the |
| Florida limited liability company, ("Former Franchisee"), the undersigned owners of Former Franchisee ("Owners") and, a |
| [a/an Formation State] [corporation/limited liability company]"_("New Franchisee"). |
| RECITALS |
| WHEREAS, Franchisor and Former Franchisee entered into that certain franchise agreement dated, 20 ("Former Franchise Agreement"), in which |
| Franchisor granted Former Franchisee the right to operate a Kidokinetics franchise located at ("Franchised Business"); and |
| WHEREAS, Former Franchisee desires to assign ("Requested Assignment") the Franchised Business to New Franchisee, New Franchisee desires to accept the Requested Assignment of the Franchised Business from Former Franchisee, and Franchisor desires to approve the Requested Assignment of the Franchised Business from Former Franchisee to New Franchisee upon the terms and conditions contained in this Agreement, including that New Franchisee sign Franchisor's current form of franchise agreement together with all exhibits and attachments thereto ("New Franchise Agreement"), contemporaneously herewith. |
| NOW, THEREFORE, in consideration of the mutual covenants, promises, and agreements herein contained, the parties hereto hereby covenant, promise, and agree as follows: |
| 1. Payment of Fees . In consideration for the Requested Assignment, Former Franchisee acknowledges and agrees to pay Franchisor the Transfer Fee, as required under the Franchise Agreement (" Franchisor's Assignment Fee "). |
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- Assignment and Assumption. Former Franchisee hereby consents to assign all of its rights and delegate its duties with regard to the Former Franchise Agreement and all exhibits and attachments thereto from Former Franchisee to New Franchisee, subject to the terms and conditions of this Agreement, and conditioned upon New Franchisee's signing the New Franchise Agreement pursuant to Section 5 of this Agreement.
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- Consent to Requested Assignment of Franchised Business. Franchisor hereby consents to the Requested Assignment of the Franchised Business from Former Franchisee to New Franchisee upon receipt of the Franchisor's Assignment Fee from Former Franchisee and the mutual execution of this Agreement by all parties. Franchisor waives its right of first refusal set forth in the Former Franchise Agreement.
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- Termination of Rights to the Franchised Business. The parties acknowledge and agree that effective upon the date of this Agreement, the Former Franchise Agreement shall terminate and all of Former Franchisee's rights to operate the Franchised Business are terminated and that from the date of this Agreement only New Franchisee shall have the sole right to operate the Franchised Business under
the New Franchise Agreement. Former Franchisee and the undersigned Owners agree to comply with all of the covenants in the Former Franchise Agreement that expressly or by implication survive the termination, expiration, or transfer of the Former Franchise Agreement. Unless otherwise precluded by state law, Former Franchisee shall execute Franchisor's current form of General Release Agreement.
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- New Franchise Agreement. New Franchisee shall execute the New Franchise Agreement for the Franchised Business (as amended by the form of Addendum prescribed by Franchisor, if applicable), and any other required contracts for the operation of a Kidokinetics franchise as stated in Franchisor's Franchise Disclosure Document.
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- Former Franchisee's Contact Information. Former Franchisee agrees to keep Franchisor informed of its current address and telephone number at all times during the three-year period following the execution of this Agreement.
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- Acknowledgement by New Franchisee. New Franchisee acknowledges and agrees that the purchase of the rights to the Franchised Business ("Transaction") occurred solely between Former Franchisee and New Franchisee. New Franchisee also acknowledges and agrees that Franchisor played no role in the Transaction and that Franchisor's involvement was limited to the approval of Requested Assignment and any required actions regarding New Franchisee's signing of the New Franchise Agreement for the Franchised Business. New Franchisee agrees that any claims, disputes, or issues relating New Franchisee's acquisition of the Franchised Business from Franchisee are between New Franchisee and Former Franchisee, and shall not involve Franchisor.
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- Representation.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the Approval of Requested Assignment requires specific actions from involved parties. Specifically, if a franchisee wishes to transfer their Kidokinetics business to a new franchisee, Kidokinetics requires that the former franchisee pay Kidokinetics the transfer fee, as stipulated in the franchise agreement. The franchisor must also grant written approval of the transfer's material terms, ensuring that the price and payment terms do not negatively impact the Kidokinetics business operations.
Furthermore, the franchisee is obligated to provide all proposed transfer documents to Kidokinetics for review at least 30 days before the transfer's closing. The franchisee must also address any existing defaults under the franchise agreement or any other agreements with Kidokinetics or its affiliates, ensuring substantial compliance during the agreement's term. Both the franchisee and the new transferee must provide Kidokinetics with a copy of the executed purchase agreement and all supporting documents, including the transferee's agreement to fulfill all of the franchisee's obligations under the original agreement.
Additionally, the new transferee must obtain and maintain all necessary permits and licenses required to operate the Kidokinetics business within the timeframe specified by Kidokinetics. The franchisee is also responsible for requesting that Kidokinetics provide the prospective transferee with the most current form of the franchise disclosure document. These stipulations ensure that Kidokinetics maintains control over who enters the franchise system and that the transfer process adheres to their standards and legal requirements.