After termination of my Kidokinetics franchise, can I interfere with the business of other Kidokinetics franchisees?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 18.5.2.
Upon the expiration or earlier termination of this Agreement, or upon a Transfer and continuing for 24 months, Franchisee and Principals, and the spouse of Franchisee and each Principal if any, 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 Competing Business within a twenty (20) mile radius of the perimeter of (a) the Territory being granted hereunder, or (b) any other Territory licensed by Franchisor as of the date of expiration or termination of this Agreement; (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Kidokinetics franchisees; or (v) solicit business from customers of Franchisee's former Kidokinetics Business or contact any of Franchisor's suppliers or vendors for any competitive business purpose.
- 18.6.
Reasonableness of Restrictions.
Franchisee acknowledges and agrees that the covenants not to compete set forth in this Agreement are fair and reasonable and will not impose any undue hardship on Franchisee or Principals, if any, since Franchisee or Principals, as the case may be, have other considerable skills, experience and education which afford Franchisee or Principals, as the case may be, the opportunity to derive income from other endeavors.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, after the termination of the Franchise Agreement, you are restricted from interfering with the business of other Kidokinetics franchisees. Specifically, for a period of 24 months after the agreement's expiration or termination, you cannot directly or indirectly take actions that would disrupt or jeopardize the business of any Kidokinetics franchisee. This restriction applies to you, your principals, and your spouse.
This non-interference clause is designed to protect the goodwill associated with the Kidokinetics brand and the overall system. It prevents former franchisees from leveraging their knowledge of the Kidokinetics system to undermine existing franchisees. The FDD states that you may not "in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize the business of the Franchisor or any Kidokinetics franchisees".
Kidokinetics considers these restrictions fair and reasonable, as stated in the FDD, because franchisees and their principals typically possess other skills and experiences that allow them to earn income from other sources. This acknowledgement suggests that while the non-compete and non-interference clauses are in effect, you are expected to pursue business opportunities outside of the Kidokinetics system and its immediate competitive sphere.