Upon termination or expiration of the Kidokinetics agreement, what obligation does the franchisee have regarding sums owing to the franchisor and its affiliates?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.1.4. promptly pay all sums owing to Franchisor and its affiliates. Such sums will include all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of any default by Franchisee. The payment obligation gives rise to and remains until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, fixtures and vehicles owned by Franchisee and used in the operation of the Kidokinetics Business at the time of default;
- 17.1.5. pay to Franchisor all damages, costs and expenses, including reasonable attorneys' fees, incurred by Franchisor in connection with obtaining any remedy available to Franchisor for any violation of this Agreement and, subsequent to the termination or expiration of this Agreement, in obtaining injunctive or other relief for the enforcement of any provisions of this Agreement that survive its termination;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, the franchisee is obligated to promptly pay all sums owed to Kidokinetics and its affiliates. These sums encompass all damages, costs, and expenses, including reasonable attorneys' fees, incurred by Kidokinetics due to any default by the franchisee. This payment obligation creates a lien in favor of Kidokinetics against the franchisee's personal property, furnishings, equipment, fixtures, and vehicles used in the Kidokinetics business at the time of default, which remains until the payment is made in full.
Additionally, the franchisee must pay Kidokinetics all damages, costs, and expenses, including reasonable attorneys' fees, that Kidokinetics incurs while pursuing any remedy available for violations of the agreement. This includes obtaining injunctive or other relief to enforce any provisions of the agreement that survive its termination or expiration.
This clause ensures that Kidokinetics can recover any outstanding debts and legal costs associated with the franchisee's default or violation of the franchise agreement, protecting Kidokinetics's financial interests even after the agreement ends. The lien on the franchisee's business assets provides Kidokinetics with a security interest to ensure payment of these obligations.