Upon request, or upon termination of employment, what is a Kidokinetics Covenantor required to do with materials containing Confidential Information?

According to Kidokinetics's 2024 Franchise Disclosure Document, a Covenantor, such as an employee or agent of the franchisee, is obligated to surrender any material containing Confidential Information to the franchisee or franchisor. This requirement is triggered either upon request or upon termination of their employment or association with the Kidokinetics business. Confidential Information includes, but is not limited to, the contents of the Kidokinetics operations manual, methods, processes, customer lists, vendor partnerships, sales and technical information, costs, service prices, software tools and applications, website and/or email design, products, services, equipment, technologies and procedures relating to the operation of the Kidokinetics Business.

This provision ensures that Kidokinetics maintains control over its proprietary information and trade secrets. By requiring the surrender of materials, Kidokinetics aims to prevent unauthorized use or disclosure of its Confidential Information, which could harm its competitive advantage and the goodwill associated with the Kidokinetics system. This is a standard practice in franchising, as franchisors need to protect their intellectual property and operational methods.

For a prospective Kidokinetics franchisee, this means they must ensure that all employees, agents, or anyone with access to Confidential Information are aware of and comply with this requirement. The franchisee is responsible for collecting and returning these materials when an individual's association with the business ends. This obligation extends to protecting the information through measures like firewalls and secure storage, and reporting any loss or theft of confidential materials to Kidokinetics immediately.

Failure to comply with this provision could result in legal action and potential damages, as the franchisee is responsible for safeguarding Kidokinetics's Confidential Information. Therefore, franchisees must have systems in place to manage and retrieve confidential materials from their personnel to maintain compliance with the franchise agreement.