Under what circumstances will a manager or officer of a Kidokinetics franchisee be presumed to have violated the non-compete agreement due to the actions of a family member?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
You acknowledge you could circumvent the purpose of this Agreement by disclosing Intellectual Property to an immediate family member (i.e., spouse, parent, sibling, child, or grandchild). You also acknowledge that it would be difficult for us to prove whether you disclosed the Intellectual Property to family members. Therefore, you agree you will be presumed to have violated the terms of this Agreement if any member of your immediate family uses or discloses the Intellectual Property. However, you may rebut this presumption by furnishing evidence conclusively showing you did not disclose the Intellectual Property to the family member.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a manager or officer of a Kidokinetics franchise can be presumed to have violated the non-compete agreement if an immediate family member engages in prohibited activities during the period when the manager or officer is restricted from doing so. This presumption also applies if a family member uses or discloses Kidokinetics's know-how. Immediate family members are defined as a spouse, parent, sibling, child, or grandchild.
Kidokinetics acknowledges that it would be difficult to prove whether the manager or officer disclosed the know-how to family members, which is why the presumption exists. However, the manager or officer has the opportunity to rebut this presumption by providing conclusive evidence that they did not disclose the know-how to the family member.
This clause places a significant responsibility on the manager or officer to ensure their immediate family members do not engage in activities that could be construed as a violation of the non-compete agreement. It is important for prospective franchisees and their managers/officers to understand these terms and discuss them with family members to avoid potential legal issues with Kidokinetics.