Under what circumstances can the time period or geographic scope of the non-compete agreement for Kidokinetics be reduced?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- d. If the period of time or the geographic scope specified in Section 2.b. above should be adjudged unreasonable in any proceeding, then the period of time will be reduced by such number of months or the geographic scope will be reduced by the elimination of such portion thereof, or both, so that such restrictions may be enforced for such time and scope as are adjudged to be reasonable. In addition, Franchisor shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement or any portion thereof, without Covenantor's or Franchisee's consent, effective immediately upon receipt by Covenantor of written notice thereof, and Covenantor agrees to forthwith comply with any covenant as so modified.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, the time period or geographic scope of the non-compete agreement can be reduced under two primary circumstances. First, if a court of competent jurisdiction determines that the specified time or geographic scope is unreasonable, the agreement will be modified to be enforceable for a time and scope deemed reasonable by the court. This means that if a franchisee challenges the non-compete agreement in court and wins, the court can order the restrictions to be less stringent.
Second, Kidokinetics retains the right to unilaterally reduce the scope of any covenant within the agreement. This reduction can be implemented at Kidokinetics's sole discretion and becomes effective immediately upon written notice to the franchisee. The franchisee's consent is not required for Kidokinetics to make these changes. This provision gives Kidokinetics flexibility to adjust the non-compete terms as they see fit, potentially making it easier for a franchisee to operate in a specific area or time frame.
These clauses provide some level of protection for the franchisee against overly broad non-compete restrictions, while also allowing Kidokinetics to maintain control over its brand and market. Prospective franchisees should carefully consider these provisions and understand the potential implications for their future business activities should they leave the Kidokinetics system.