Under what circumstances can a Kidokinetics franchise be terminated for unauthorized use of intellectual property or confidential information?

According to Kidokinetics' 2024 Franchise Disclosure Document, a franchisee's unauthorized use of the Marks or other Intellectual Property, as well as any unauthorized use or disclosure of Confidential Information, constitutes grounds for termination of the franchise agreement. This means that if a franchisee uses Kidokinetics' logos, trademarks, copyrighted materials, trade secrets, or operational manuals in a way not explicitly permitted by the franchise agreement, Kidokinetics has the right to terminate the agreement.

Confidential Information includes customer lists, information about credit extensions to customers, customer service purchasing histories and rates charged to customers, and sources of suppliers and purchasing arrangements with suppliers. Franchisees must take necessary steps to protect this information and notify Kidokinetics immediately if they discover any Confidential Information has been divulged in violation of the agreement. This obligation extends beyond the termination or expiration of the franchise agreement.

This provision is typical in franchising, as franchisors must protect their brand identity and proprietary information. Unauthorized use not only infringes on the franchisor's rights but can also dilute the brand's value and create unfair competition. Therefore, Kidokinetics franchisees must be vigilant in safeguarding and properly using all Intellectual Property and Confidential Information to avoid potential termination of their franchise agreement.