What section of the Kidokinetics Franchise Agreement addresses non-competition covenants during the term of the franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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| Provision | Section In the Franchise or Other Agreement | Summary | |
|---|---|---|---|
| q. | Non-competition covenants during the term of the franchise | Section 18.5.1 | You, each principal, and your and your principals' spouses shall not, either directly or indirectly, for themselves or through, on behalf of, or in conjunction with, any person or entity: (i) divert, or attempt to divert, any business or customer of the Kidokinetics Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any children's sports or fitness business or any other business offering any other goods or services offered or authorized for sale by System franchisees ("Competing Business"); (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize our business or the business of any Kidokinetics franchisees (Subject to applicable state law). |
| r. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Section 18.5.1 of the Franchise Agreement outlines the non-competition covenants that apply while the franchise is active. This section specifies that the franchisee, their principals, and their spouses are prohibited from engaging in activities that could harm the Kidokinetics business or its franchisees.
Specifically, franchisees are restricted from diverting business or customers to competitors, participating in any competing children's sports or fitness business, or performing any action that could damage the goodwill associated with the Kidokinetics brand and system. They are also prohibited from interfering with or disrupting the business of Kidokinetics or its franchisees.
These restrictions are typical in franchise agreements to protect the brand and prevent franchisees from using the franchisor's proprietary information and systems to compete against the franchise itself. Franchisees should carefully review Section 18.5.1 to fully understand the scope of these non-competition covenants during the term of their Kidokinetics franchise agreement.