Under the Kidokinetics Franchise Agreement, is a partnership created between the franchisee and franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, commitments and understandings contained herein, the parties hereby agree as follows:
AGREEMENT
- GRANT OF FRANCHISE. Franchisor hereby grants to Franchisee and Franchisee accepts, upon the terms and conditions herein contained, the license to operate a Kidokinetics franchise (the "Kidokinetics Business" or the "Franchised Business"), using only the Marks licensed hereunder, in strict conformity with the System, which may be changed, improved and further developed by Franchisor from time to time. This grant applies only to the territory which will be selected by Franchisee and approved by Franchisor, which is more particularly described in Section 2 herein and in Attachment "B" (the "Territory"). Franchisee understands and acknowledges that present or future franchisees of Franchisor may operate under different forms of franchise agreements and consequently that Franchisor's obligations and rights with respect to its various franchisees may differ materially in certain circumstances.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
Based on the 2024 Kidokinetics Franchise Disclosure Document, the agreement explicitly establishes a franchisor-franchisee relationship, not a partnership. The agreement grants the franchisee a license to operate a Kidokinetics business within a specific territory, using the Kidokinetics marks and adhering to the Kidokinetics system. This system includes methods and procedures detailed in the Franchise Operations Manual, which Kidokinetics can modify at its discretion.
The franchisee's rights and duties are personal, based on Kidokinetics's assessment of their character, skills, and financial capacity. The franchisee cannot transfer the agreement or any rights without Kidokinetics's approval. The franchisee is responsible for managing the business, including financial obligations, taxes, and maintaining a separate phone line under the Kidokinetics name.
Kidokinetics developed the system and intends for franchisees to emulate and enhance the brand's image. The franchisee must operate the business according to the Franchise Operations Manual and any updates. This manual contains trade secrets and confidential information that the franchisee must keep confidential, even after the agreement ends. The franchisee is also required to use Kidokinetics's proprietary software and participate in system-wide computer networks, adhering to Kidokinetics's standards and protocols. These factors indicate a structured franchisor-franchisee relationship rather than a partnership, where both parties would typically have more equal control and shared decision-making power.