Kumon Franchise Disclosure Document Analysis

Unilateral Royalty Rate Changes With No Contractual Cap

Kumon can increase per-student royalty rates at any time on just 60 days' notice, and there is no contractual ceiling on how much rates can rise. The franchisee's only recourse is to terminate the agreement with 60 days' notice.

Source: p.14

No Exclusive Territory Granted to Any Franchisee

Kumon does not grant franchisees any exclusive or protected territory. Kumon and its affiliates retain the right to open additional centers — franchised or company-owned — at any location, including immediately adjacent to an existing franchisee's center.

Source: p.38

Renewal Requires Then-Current Agreement With Potentially Different Terms

Upon renewal, franchisees must execute the then-current form of the Franchise Agreement, which may contain materially different fees, operational standards, or territory provisions than those in effect at the time of the original signing. A general release of all claims against Kumon is also required as a condition of renewal.

Source: p.52