Kidokinetics 2024 Franchise FAQ - FDD Ninja

Question 1

According to the Kidokinetics franchise agreement, what is the scope of prohibited activities related to 'Competing Businesses'?

Accepted Answer

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|    | Provision                                                              | Section In the Franchise or Other Agreement | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|----|------------------------------------------------------------------------|---------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| q. | Non-competition covenants during the term of the franchise             | Section 18.5.1                                    | You, each principal, and your and your principals' spouses shall not, either directly or indirectly, for themselves or through, on behalf of, or in conjunction with, any person or entity: (i) divert, or attempt to divert, any business or customer of the Kidokinetics Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in any children's sports or fitness business or any other business offering any other goods or services offered or authorized for sale by System franchisees ("Competing Business"); (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System; or (iv) in any manner interfere with, disturb, disrupt, decrease or otherwise jeopardize our business or the business of any Kidokinetics franchisees (Subject to applicable state law).                                                                                                                                                                                                                                                                                                                                                                                                                   |
| r. | Non-competition covenants after the franchise is terminated or expires | Section 18.5.2                                    | Upon the expiration or earlier termination of this Agreement or upon a transfer and continuing for 24 months, you and your principals, and your spouse and the spouse of each principal, shall not, either directly or indirectly, for themselves or through, on behalf of or in conjunction with any person or entity (i) divert, or attempt to divert, any business or customer of the Kidokinetics Business or of other franchisees in the System to any competitor, by direct or indirect inducement or otherwise; (ii) participate as an owner, partner, director, officer, employee, consultant or agent or serve in any other capacity in Competing Business within (i) a 20-mile radius from Franchisee's Kidokinetics business (and including the premises of the approved location of Franchisee); and (ii) a 20-mile radius from all other Kidokinetics businesses that are operating or under development as of the beginning of the Restricted Period; provided, however, that if a court of competent jurisdiction determines that the foregoing Restricted Territory is too broad to be enforceable, then the "Restricted Territory" means the geographic area within a 10-mile radius from Franchisee's Kidokinetics business (and including the premises of the approved location of Franchisee). (iii) do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Marks and the System;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)

Question 2

According to the table, did Kidokinetics reacquire any franchises between 2021 and 2023?

Accepted Answer

|  |  | Outlets |  |  |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start |  |  |  | Reacquired | Ceased |  |
|  |  |  | Outlets | Termina- | Non- |  | Opera- | Outlets at End of |
| State | Year | of |  |  |  | by |  |  |
|  |  | the Year | Opened | tions | Renewals | Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Arizona | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 4 | 0 | 0 | 0 | 0 | 4 |
| California | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 8 | 0 | 0 | 0 | 0 | 8 |
| Colorado | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 3 | 0 | 0 | 0 | 0 | 5 |
| Florida | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 | 3 | 2 | 0 | 0 | 0 | 0 | 5 |
|  | 2023 | 5 | 2 | 0 | 0 | 0 | 0 | 7 |
| Georgia | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 2 | 0 | 0 | 0 | 0 | 4 |
| Idaho | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 1 | 0 | 0 | 0 | 0 | 1 |
| Indiana* | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 3

Across all listed states, what was the highest number of Kidokinetics outlets opened in a single state during 2023?

Accepted Answer

|  |  | Outlets |  | Termina- tions |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start | Outlets |  | Non- | Reacquired | Ceased Opera- | Outlets at End of |
| State | Year | of the Year | Opened |  | Renewals | by Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Texas | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 | 3 | 7 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 18 | 0 | 0 | 0 | 0 | 28 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 4

Across all states, how many Kidokinetics outlets ceased operations for other reasons in 2023?

Accepted Answer

021 - 2023 | | | Outlets | | | | | | | |---|---|---|---|---|---|---|---|---| | | | at Start | | | | Reacquired | Ceased | | | | | | Outlets | Termina- | Non- | | Opera- | Outlets at End of | | State | Year | of | | | | by | | | | | | the Year | Opened | tions | Renewals | Franchisor | tions-Other Reasons | the Year | | | | | | | | | | | | Arizona | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2023 | 0 | 4 | 0 | 0 | 0 | 0 | 4 | | California | 2021 | 0 | 0 | 0 | 0 | Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 5

What is the estimated low-end total initial investment for two Kidokinetics franchises?

Accepted Answer

| Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | \$100,000 | \$170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | \$50,500 | \$84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | \$12,000 | \$19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | \$162,500 | \$204,200 | Per Table Above | Per Table Above | Per Tab Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 17–22)

Question 6

Did any Kidokinetics franchises in any state have their agreements terminated in 2021, 2022, or 2023?

Accepted Answer

|  |  | Outlets |  | Termina- tions |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start | Outlets |  | Non- | Reacquired | Ceased Opera- | Outlets at End of |
| State | Year | of the Year | Opened |  | Renewals | by Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Texas | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 | 3 | 7 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 18 | 0 | 0 | 0 | 0 | 28 |
| Utah | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
|  | 2023 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
| Virginia | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 4 | 0 | 0 | 0 | 0 | 6 |
| Washington | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
| Wisconsin | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Total | 2021 | 7 | 0 | 0 | 0 | 0 | 0 | 7 |
|  | 2022 | 7 | 29 | 0 | 0 | 0 | 0 | 36 |
|  | 2023 | 36 | 89 | 0 | 0 | 0 | 0 | 125 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 7

How many Kidokinetics outlets terminated in any state during 2021?

Accepted Answer

|  |  | Outlets |  | Termina- tions |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start | Outlets |  | Non- | Reacquired | Ceased Opera- | Outlets at End of |
| State | Year | of the Year | Opened |  | Renewals | by Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Texas | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 | 3 | 7 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 18 | 0 | 0 | 0 | 0 | 28 |
| Utah | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
|  | 2023 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
| Virginia | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
|  | 2023 | 2 | 4 | 0 | 0 | 0 | 0 | 6 |
| Washington | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 3 | 0 | 0 | 0 | 0 | 3 |
| Wisconsin | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 |
| Total | 2021 | 7 | 0 | 0 | 0 | 0 | 0 | 7 |
|  | 2022 | 7 | 29 | 0 | 0 | 0 | 0 | 36 |
|  | 2023 | 36 | 89 | 0 | 0 | 0 | 0 | 125 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 8

For Kidokinetics, were any outlets terminated or not renewed in any of the listed states between 2021 and 2023?

Accepted Answer

icture_0.jpeg) | | | Outlets | | Termina- tions | | | | | |---|---|---|---|---|---|---|---|---| | | | at Start | Outlets | | Non- | Reacquired | Ceased Opera- | Outlets at End of | | State | Year | of the Year | Opened | | Renewals | by Franchisor | tions-Other Reasons | the Year | | | | | | | | | | | | Texas | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 | | | 2022 | 3 | 7 | 0 | 0 | 0 | 0 | 10 | | | 2023 | 10 | 18 | 0 | 0 | 0 | 0 | 28 | | Utah | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2022 | 0 | 3 | 0 | 0 | 0 | 0 | 3 | | | 2023 | 3 | 0 | 0 | 0 | 0 | 0 | 3 | | Virginia | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2022 | 0 | 2 | 0 | 0 | 0 | 0 | 2 | | | 2023 | 2 | 4 | 0 | 0 | 0 | 0 | 6 | | Washington | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2023 | 0 | 3 | 0 | 0 | 0 | 0 | 3 | | Wisconsin | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2023 | 0 | 2 | 0 | 0 | 0 | 0 | 2 | | Total | 2021 | 7 | 0 | 0 | 0 | 0 | 0 | 7 | | | 2022 | 7 | 29 | 0 | 0 | 0 | 0 | 36 | | | 2023 | 36 | 89 | 0 | 0 | 0 | 0 | 125 | ^\*The Indiana franchisee's three outlets ceased operations in 2024 prior to the issuance of this Disclosure Document. Table No. 4 Status of Company-Owned Outlets For Years 2021 - 2023 | State | | | Outlets Opened | Outlets Reacquired From Franchisee | | | | |---|---|---|---|---|---|---|---| | | | Outlets at | | | Outlets | Outlets Sold to | Outlets at | | | Year | | | | | | | | | | Start of Year | | | Closed | Franchisee | End of Year | | | | | | | | | | | | | | | | | | | | Florida | 2021 | 1 | 3 | 0 | 0 | 0 | 4 | | | 2022 | 4 | 0 | 0 | 0 | 0 | 4 | | | 2023 | 4 | 2 | 0 | 0 | 0 | 6 | | Georgia | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | | | 2022 | 0 | 2 | 0 | 0 | 0 | 2 | ![](_page_56_Picture_5.jpeg) ![](_page_57_Picture_0.jpeg) | | | | | Outlets | | | Outlets at End of Year | |---|---|---|---|---|---|---|---| | | | Outlets at | Outlets | Reacquired | Outlets | Outlets Sold to | | | State | Year | | | | | | | | | | Start of Year | Opened | From | Closed | Franchisee | | | | | | | | | | | | | | | | Franchisee | | | | | | 2023 | 2 | 1 | 0 | 0 | 0 | 3 | | Total Outlets | 2021 | 1 | 3 | 0 | 0 | 0 | 4 | | | 2022 | 4 | 2 | 0 | 0 | 0 | 6 | | | 2023 | 6 | 3 | 0 | 0 | 0 | 9 | Table No. 5 Projected Openings as of December 31, 2023 | | | Projected New | Projected New | |---|---|---|---| | | Franchise Agreements Signed | | | | State | But Outlet Not Opened | Franchised Outlets in the Next Fiscal Year | Company-Owned Outlets in the Next Fiscal Year | | | | | | | Arizona | 0 | 2 | 0 | | California | 3 | 4 | 0 | | Colorado | 0 | 0 | 0 | | Florida | 0 | 3 | 0 | | Georgia | 0 | 2 | 0 | | Idaho | 0 | 0 | 0 | | Illinois | 0 | 2 | 0 | | Indiana | 0 | 0 | 0 | | Massachusetts | 0 | 2 | 0 | | Minnesota | 0 | 3 | 1 | | North Carolina | 0 | 4 | 1 | | New Jersey | 3 | 3 | 0 | | New York | 0 | 3 | 0 | | Oregon | 3 | 0 | 0 | | South Carolina | 0 | 2 | 0 | | Texas | 0 | 3 | 0 | | Virginia | 0 | 2 | 0 | | Total | 9 | 35 | 2 | #### **Franchisee Information** The names, addresses and telephone numbers of our current franchisees are attached to this Franchise Disclosure Document as Exhibit E. The name and last known address and telephone number of ![](_page_57_Picture_6.jpeg) ![](_page_58_Picture_0.jpeg) every current franchisee and every franchisee who has had a Kidokinetics Franchise terminated, cancelled, not renewed or otherwise voluntarily or involuntarily ceased to do business under our Franchise Agreement during the one-year period ending December 31, 2023, or who has not communicated with us within ten weeks of the Issuance Date of this Franchise Disclosure Document, is listed in Exhibit E. In some instances, current and former franchisees may sign provisions restricting their ability to speak openly about their experiences with the Kidokinetics System. During the last three years, we had one current franchisee sign confidentiality provisions that would restrict the franchisee's ability to speak openly about their experience with the Kidokinetics Franchise System. You may wish to speak with current and former franchisees but know that not all such franchisees can communicate with you. If you buy a Kidokinetics Franchise, your contact information may be disclosed to other buyers when you leave the Franchise System. As of the Issuance Date of this Franchise Disclosure Document, there are no franchise organizations sponsored or endorsed by us and no independent franchisee organizations have asked to be included in this Franchise Disclosure Document. We do not have any trademark specific franchisee organizations. #### ITEM 21. FINANCIAL STATEMENTS Attached as Exhibit D to this Franchise Disclosure Document are our audited financial statements for the fiscal years ending December 31, 2023, 2022 and 2021. Our fiscal year end is December 31. Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 9

What are the requirements for a proposed transferee to be approved by Kidokinetics?

Accepted Answer

Franchisee's rights and duties under this Agreement are personal to Franchisee and/or Franchisee's Principal(s), and Franchisor has made this Agreement in reliance on Franchisor's perceptions of the individual and collective character, skill, aptitude, attitude, business ability, and financial capacity of Franchisee and/or Franchisee's Principals. Thus, no transfer, as hereafter defined, may be made without Franchisor's prior written approval, which will not be unreasonably withheld. Franchisor may void any transfer made without such approval. - 15.3. Transfers by Franchisee. Franchisee shall not directly or indirectly sell, assign, transfer, give, devise, convey or encumber this Agreement or any right or interest herein or hereunder (a "Transfer"), the Kidokinetics Business or any assets thereof (except in the ordinary course of business) or suffer or permit any such assignment, transfer, or encumbrance to occur by operation of law unless it first obtains the written consent of Franchisor, except as provided in Section 15.6 of this Agreement. A transfer of any stock in the Franchisee if it is a corporation or a transfer of any ownership rights in Franchisee if it is a partnership, a limited liability company or limited partnership is a Transfer and is prohibited without prior written consent of Franchisor. If Franchisee has complied fully with this Agreement, Franchisor will not unreasonably withhold its consent of a Transfer that meets the following requirements: - 15.3.1. The proposed transferee must be an individual of good moral character or the principals of the transferee must all be of good moral character and otherwise meet Franchisor's then-applicable standards for franchisees; - 15.3.2. The transferee must have sufficient business experience, aptitude and financial resources to operate the Kidokinetics Business and to comply with this Agreement; - 15.3.3. The transferee and its or their Manager have agreed to complete Franchisor's Initial Management Training Program to Franchisor's satisfaction; - 15.3.4. Franchisee has paid all amounts owed to Franchisor and third-party creditors; - 15.3.5. The transferee has executed Franchisor's then-standard form of Franchise Agreement, which may have terms and conditions materially different from this Agreement, except that the transferee will not be required to pay an Initial Franchise Fee; ![](_page_92_Picture_0.jpeg) - 15.3.6. Franchisee and the transferee and each of Franchisee's and the transferee's Principals shall have executed a general release of all claims known or unknown under seal, in a form satisfactory to Franchisor, of any and all claims against Franchisor and Franchisor's officers, directors, shareholders, members and employees in their corporate and individual capacities, including, without limitation, claims arising out of or concerning under the Franchise Agreement and federal, state and local laws, rules and ordinances (to the fullest extent permitted by law). Franchisee will agree to subordinate any claims Franchisee may have against the transferee to Franchisor, and indemnify Franchisor for any acts, whether negligent or intentional, committed by Franchisee during the sales negotiations between Franchisee and transferee. - 15.3.7. Franchisor has granted written approval of the material terms and conditions of the Transfer, including, without limitation, that the price and terms of payment will not adversely affect the Kidokinetics Business's operation. However, Franchisor's approval of a Transfer is not in any way a representation or warranty of the transferee's success or the soundness of transferee's decision to purchase the Franchise on such terms and conditions. Franchisee shall provide Franchisor all proposed transfer documents for Franchisor's review at least 30 days prior to a closing of the proposed Transfer; - 15.3.8. If Franchisee or any Principal finances any part of the sale price of the Transfer, Franchisee or its Principal have agreed that all obligations of the transferee under any notes, agreements or security interests to Franchisee or its Principal will be subordinate to the transferee's obligations to Franchisor and subject to all limitations of Section 15.8 below; - 15.3.9. Franchisee must cure all existing defaults under this Agreement, or any other agreement between Franchisee and Franchisor, Franchisor's affiliates, Franchisor's designated/approved suppliers and vendors, within the period permitted for cure and have substantially complied with such agreements during their respective terms; - 15.3.10. Franchisee or transferee will provide Franchisor a copy of the executed purchase agreement relating to the proposed transfer with all supporting documents and schedules, including transferee's assumption of an agreement to faithfully perform all of Franchisee's obligations under this Agreement; - 15.3.11. Franchisee (and Franchisee's principals if Franchisee is a partnership, corporation or limited liability company), and the members of their respective families must comply with the post-termination provisions of this Agreement; - 15.3.12. The transferee must obtain, within the time limits set by Franchisor, and maintain thereafter, all permits and licenses required for the operation of the Kidokinetics Business; - 15.3.13. Franchisee must request that Franchisor provide the prospective transferee with Franchisor's current form of franchise disclosure document, and Franchisor will not be liable for any representations not included in the franchise disclosure document; - 15.3.14. Franchisor's approval of the transfer will not constitute a waiver of any claims Franchisor may have against the transferring party; - 15.3.15. Franchisor will have the right to disclose to any prospective transferee such revenue reports and other financial information concerning Franchisee and Franchisee's Kidokinetics Business as Franchisee has supplied Franchisor hereunder; and ![](_page_93_Picture_0.jpeg) - 15.3.16. In any event, Franchisor may withhold or condition Franchisor's consent to any transfer as Franchisor deems appropriate based on the circumstances of the transfer or otherwise. Source: Item 22 — CONTRACTS (FDD page 59)

Question 10

For Kidokinetics, in which state did the number of outlets increase the most from the start of 2021 to the end of 2023?

Accepted Answer

|  |  | Outlets |  | Termina- tions |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start | Outlets |  | Non- | Reacquired | Ceased Opera- | Outlets at End of |
| State | Year | of the Year | Opened |  | Renewals | by Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Texas | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 | 3 | 7 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 18 | 0 | 0 | 0 | 0 | 28 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 11

In which state did Kidokinetics have the most outlets at the end of 2023?

Accepted Answer

|  |  | Outlets |  | Termina- tions |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start | Outlets |  | Non- | Reacquired | Ceased Opera- | Outlets at End of |
| State | Year | of the Year | Opened |  | Renewals | by Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Texas | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 | 3 | 7 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 18 | 0 | 0 | 0 | 0 | 28 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 12

In which state did Kidokinetics have the most outlets opened in 2023?

Accepted Answer

|  |  | Outlets |  | Termina- tions |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start | Outlets |  | Non- | Reacquired | Ceased Opera- | Outlets at End of |
| State | Year | of the Year | Opened |  | Renewals | by Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Texas | 2021 | 3 | 0 | 0 | 0 | 0 | 0 | 3 |
|  | 2022 | 3 | 7 | 0 | 0 | 0 | 0 | 10 |
|  | 2023 | 10 | 18 | 0 | 0 | 0 | 0 | 28 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 13

In which states did Kidokinetics open more than 5 outlets in 2023?

Accepted Answer

|  |  | Outlets |  |  |  |  |  |  |
|---|---|---|---|---|---|---|---|---|
|  |  | at Start |  |  |  | Reacquired | Ceased |  |
|  |  |  | Outlets | Termina- | Non- |  | Opera- | Outlets at End of |
| State | Year | of |  |  |  | by |  |  |
|  |  | the Year | Opened | tions | Renewals | Franchisor | tions-Other Reasons | the Year |
|  |  |  |  |  |  |  |  |  |
| Arizona | 2021 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2023 | 0 | 4 | 0 | 0 | 0 | 0 | 4

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 14

What was the total deferred revenue (current and non-current) reported by Kidokinetics as of December 31, 2023?

Accepted Answer

3, 2022, and 2021:

| Deferred revenue, current     | \$  | 506,073   | \$ | 595,065 | \$   | - |  |
|-------------------------------|-----|-----------|----|---------|------|---|--|
| Deferred revenue, non-current |     | 1,844,262 |    | 289,713 |      | - |  |
|                               | -\$ | 2.350.335 | \$ |

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)

Question 15

What was the total number of Kidokinetics outlets at the end of 2023?

Accepted Answer

| Outlet Type         | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---------------------|------|-------------------------------------|-----------------------------------|------------|
| Franchised Outlets* | 2021 | 7                                   | 7                                 | 0          |
|                     | 2022 | 7                                   | 36                                | +29        |
|                     | 2023 | 36                                  | 121                               | +85        |
| Company-Owned**     | 2021 | 1                                   | 4                                 | +3         |
|                     | 2022 | 4                                   | 6                                 | +2         |
|                     | 2023 | 6                                   | 9                                 | +3         |
| Total Outlets       | 2021 | 8                                   | 11                                | +3         |
|                     | 2022 | 11                                  | 42                                | +31        |
|                     | 2023 | 42                                  | 130                               | +88        |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 16

What was the total number of Kidokinetics outlets opened in 2022 across all states?

Accepted Answer

| Outlet Type         | Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---------------------|------|-------------------------------------|-----------------------------------|------------|
| Franchised Outlets* | 2021 | 7                                   | 7                                 | 0          |
|                     | 2022 | 7                                   | 36                                | +29        |
|                     | 2023 | 36                                  | 121                               | +85        |
| Company-Owned**     | 2021 | 1                                   | 4                                 | +3         |
|                     | 2022 | 4                                   | 6                                 | +2         |
|                     | 2023 | 6                                   | 9                                 | +3         |
| Total Outlets       | 2021 | 8                                   | 11                                | +3         |
|                     | 2022 | 11                                  | 42                                | +31        |
|                     | 2023 | 42                                  | 130                               | +88        |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 54–59)

Question 17

What are the different types of fees a Kidokinetics franchisee must pay (Items 5 and 6) and what do these fees cover?

Accepted Answer

jpeg) #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is \$60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) \$60,000 for the first Franchise Agreement; (b) \$40,000 for the second Franchise Agreement; and (c) \$35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from \$17,500 (for a Franchise sold to one of our officers) to \$60,000. #### Initial Marketing Package We will provide an initial marketing package ("Initial Marketing Package") when you sign your Franchise Agreement. You will pay us \$5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us \$1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. ![](_page_11_Picture_0.jpeg) #### Software License Fee You must pay us a software licensing fee ("Software License Fee") for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of \$3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the "Software License Agreement," the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us \$1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of \$7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. The Enhanced Business Coaching and Training Fee covers costs and expenses (including our administrative and overhead expenses) associated with providing Enhanced Business Coaching and Training Services for your Kidokinetics Business. The Enhanced Business Coaching and Training Fee is uniform and non-refundable under any circumstances. We currently provide the Enhanced Business Coaching and Training Services directly but may designate an affiliate to provide the Enhanced Business Coaching and Training Services in the future. Enhanced Business Coaching and Training Fee is intended to be fully applied within six months of signing the Franchise Agreement, but the Enhanced Business Coaching Training Services may be provided at a later date or otherwise extended upon our mutual written agreement. #### Financial Assurances Some states have imposed a financial assurance. Please refer to the State Addendum in Exhibit G to the Franchise Disclosure Document ![](_page_11_Picture_8.jpeg) ![](_page_12_Picture_0.jpeg) #### ITEM 6.

Question 18

How does the estimated initial investment for a Kidokinetics franchise (Item 7) break down in terms of the initial franchise fee (Item 5) and other expenses?

Accepted Answer

ranchise** | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | \$100,000 | \$170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | \$50,500 | \$84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | \$12,000 | \$19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | \$162,500 | \$204,200 | Per Table Above | Per Table Above | Per Tab

Question 19

What fees are reduced for the Dallas, North Carolina, and NW Broward Kidokinetics locations?

Accepted Answer

Franchise Related Adjustments.

The Dallas Location, North Carolina Location, and NW Broward Location operate under a prior form of Franchise Agreement with alternative fee structures.

These locations pay a reduced Royalty Fee and do not pay a Brand Development Fund Contribution or technology fees.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)

Question 20

What fees and requirements are Affiliate Locations exempt from that Kidokinetics franchisees must pay?

Accepted Answer

The Affiliate Locations do not pay Royalty Fees, Brand Development Fund Contributions, or technology fees and are not subject to a Local Marketing Requirement, all of which a franchised Kidokinetics Businesses will have to pay.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)

Question 21

What are the initial fees for a Kidokinetics franchise (Item 5) and what ongoing fees are required as described in Item 6?

Accepted Answer

[Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package ("Initial Marketing Package") when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. [Item 5: INITIAL FEES] If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. #### Software License Fee You must pay us a software licensing fee ("Software License Fee") for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of $3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the "Software License Agreement," the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of $7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. [Item 6: OTHER FEES] ![](_page_14_Picture_2.jpeg) ![](_page_15_Picture_0.jpeg) - Fees. All fees paid to us or our affiliates are uniform and not refundable under any circumstances 1. once paid. Fees paid to vendors or other suppliers may be refundable depending on the vendors and suppliers. We currently require you to pay fees and other amounts due to us or our affiliates via electronic funds transfer ("EFT") or other similar means. You are required to complete the ACH authorization (in the form attached to this Franchise Disclosure Document in Exhibit H). We can require an alternative payment method or payment frequency for any fees or amounts owed to us or our affiliates under the Franchise Agreement. If you purchase multiple Kidokinetics Businesses, the fees indicated in the chart above are the fees charged and/or incurred for each Kidokinetics Businesses except as otherwise noted. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. Also, any fee expressed as a fixed dollar amount is subject to adjustment based on changes to the Consumer Price Index ("CPI") in the United States. We may periodically review and increase these fees based on changes to the CPI (in addition to any other increase), but only if the increase to the CPI is more than 5% higher than the corresponding CPI in effect on: (a) the effective date of your Franchise Agreement (for the initial fee adjustments); or (b) the date we implemented the last fee adjustment (for subsequent fee adjustments). We will notify you of any CPI adjustment at least 60 days before the fee adjustment becomes effective. We will implement no more than one CPI-related fee adjustment during any calendar year. We will notify you of any CPI adjustment at least 60 days before the fee adjustment becomes effective. We will implement no more than one CPI-related fee adjustment during any calendar year. - 2. Royalty Fee: "Gross Sales" means the revenues you receive from the sale of all goods, services and products sold at, from, or through the Kidokinetics Business or made pursuant to the rights granted hereunder, and all other income of every kind and nature related to the Kidokinetics Business, whether from cash or credit or otherwise, and regardless of collection in the case of credit, including the full redemption value of any gift card, gift certificate or coupon sold for use in the Kidokinetics Business (fees retained by or pai

Question 22

What are the initial fees for a Kidokinetics franchise (Item 5) and what ongoing fees are required as described in Item 6, and how do these fees compare to the estimated initial investment (Item 7)?

Accepted Answer

[Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package ("Initial Marketing Package") when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. ![](_page_11_Picture_0.jpeg) #### Software License Fee You must pay us a software licensing fee ("Software License Fee") for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of $3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the "Software License Agreement," the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of $7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | $100,000 | $170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | $50,500 | $84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | $12,000 | $19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | $162,500 | $204,200 | Per Table Above | Per Table Above | Per Table Above | ![](_page_14_Picture_2.jpeg) ![](_page_15_Picture_0.jpeg) - Fees. All fees paid to us or our affiliates are uniform and not refundable under any circumstances 1. once paid. Fees paid to vendors or other suppliers may be refundable depending on the vendors and suppliers. We currently require you to pay fees and other amounts due to us or our affiliates via electronic funds transfer ("EFT") or other similar means. You are required to complete the ACH authorization (in the form attached to this Franchise Disclosure Document in Exhibit H). We can require an alternative payment method or payment frequency for any fees or amounts owed to us or our affiliates under the Franchise Agreement. If you purchase multiple Kidokinetics Businesses, the fees indicated in the chart above are the fees charged and/or incurred for each Kidokinetics Businesses except as otherwise noted. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. Also, any fee expressed as a fixed dollar amount is subject to adjustment based on changes to the Consumer Price Index ("CPI") in the United States. We may periodically review and increase these fees based on changes to the CPI (in addition to any other increase), but only if the increase to the CPI is more than 5% higher than the cor

Question 23

What are the initial fees for a Kidokinetics franchise (Item 5) and what ongoing fees are required (Item 6), and how do these fees compare to the estimated initial investment (Item 7)?

Accepted Answer

[Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee (“Initial Franchise Fee”) for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) (“Multi-Franchise”). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package (“Initial Marketing Package”) when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. #### Software License Fee You must pay us a software licensing fee (“Software License Fee”) for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of $3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the “Software License Agreement,” the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of $7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | $100,000 | $170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | $50,500 | $84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | $12,000 | $19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | $162,500 | $204,200 | Per Table Above | Per Table Above | Per Table Above |

Question 24

How does the Kidokinetics initial franchise fee (Item 5) compare to the estimated costs for equipment and supplies in the initial investment (Item 7)?

Accepted Answer

The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. - 2. Furniture, Fixtures & Equipment. You must purchase (or lease) furniture, fixtures and equipment such as a desk, chair, filing cabinet, bookcase of shelving, etc. and a workspace with computer workstation with printer/fax/scanner. Although some of these items may be leased, the range This estimate includes purchase of a Computer System which we estimate to be between $500 and $1,500. - 4. Office Equipment and Supplies. You must purchase general office supplies including stationery, business cards and typical office equipment. - 5. Initial Inventory. You must purchase an initial inventory of play equipment, including balls of all types, fitness dice, lacrosse set, polyspots, juggling scarves, Little Tikes golf clubs, mini basketball hoops, baseball bases and bats, T-ball set, bowling set of pins and balls, tunnels, rope, footballs, bean bags, Frisbees, plastic cones, jump ropes, potato sacks, egg and spoon set, hula hoops, nets and goals, volleyballs, parachutes, hockey pucks and sticks, badminton sets, tennis racquets, etc.

Question 25

How does the Kidokinetics initial franchise fee (Item 5) compare to the estimated costs for equipment and supplies in the initial investment (Item 7), and what financing options are available (Item 10)?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT] #### Notes: These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating your Kidokinetics Business. We do not offer direct or indirect financing for these items. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for deposits and other payments. - 1. Initial Franchise Fee and Initial Enhanced Business Coaching and Training. These initial fees are described in greater detail in Item 5 of this Franchise Disclosure Document. - 2. Furniture, Fixtures & Equipment. You must purchase (or lease) furniture, fixtures and equipment such as a desk, chair, filing cabinet, bookcase of shelving, etc. and a workspace with computer workstation with printer/fax/scanner. Although some of these items may be leased, the range ![](_page_17_Picture_6.jpeg) ![](_page_18_Picture_0.jpeg) - shown represents an estimated purchase price. This estimate includes purchase of a Computer System which we estimate to be between $500 and $1,500. - 3. Insurance. You must obtain and maintain, at your own expense, the insurance coverage we require, and satisfy other insurance-related obligations. Please note that if you have had prior issues or claims from previous operations unrelated to the operation of a Kidokinetics Business, your rates may be significantly higher than those estimated above. - 4. Office Equipment and Supplies. You must purchase general office supplies including stationery, business cards and typical office equipment. Factors that may affect your cost of office equipment and supplies include local market conditions, competition among suppliers and other factors. We do not know if the amounts you pay for office equipment and supplies are refundable. You should inquire about the return and refund policy of the supplier at or before the time of purchase. Factors that may affect your cost of office equipment and supplies include local market conditions, competition among suppliers and other factors. [Item 7: ESTIMATED INITIAL INVESTMENT] You should inquire about the return and refund policy of the supplier at or before the time of purchase. Factors that may affect your cost of office equipment and supplies include local market conditions, competition among suppliers and other factors. - 5. Initial Inventory. You must purchase an initial inventory of play equipment, including balls of all types, fitness dice, lacrosse set, polyspots, juggling scarves, Little Tikes golf clubs, mini basketball hoops, baseball bases and bats, T-ball set, bowling set of pins and balls, tunnels, rope, footballs, bean bags, Frisbees, plastic cones, jump ropes, potato sacks, egg and spoon set, hula hoops, nets and goals, volleyballs, parachutes, hockey pucks and sticks, badminton sets, tennis racquets, etc. The cost of these items may vary based on manufacturers' discounts and specials at the time of purchase and other factors. We do not know if the amounts you pay for inventory items are refundable. You should inquire about the return and refund policy of the suppliers at or before the time of purchase. - 6. Training. The cost of training is included in the Initial Franchise Fee, but you are responsible for transportation and expenses for meals and lodging while attending training. The total cost will vary depending on the number of people attending, how far you travel and the type of accommodation you choose. - 7. Vehicle. You must have a vehicle capable of transporting play equipment. You may use a vehicle that you already own. If you do not already have an appropriate vehicle to travel to/from customer locations, you will need to lease an appropriate vehicle. The low cost assumes you already have a suitable vehicle, and the high cost represents the estimated maximum cost to lease an appropriate SUV or equivalent vehicle. - 8. Initial Marketing Package. You must pay us $5,000 before opening for initial marketing materials and website updates for your first Franchise. If you open additional Kidokinetics Businesses, you will pay us $1,000 for each Kidokinetics Business. See Item 5 for more details about this fee. [Item 7: ESTIMATED INITIAL INVESTMENT] If you open additional Kidokinetics Businesses, you will pay us $1,000 for each Kidokinetics Business. See Item 5 for more details about this fee. - 9. Licenses & Permits. State and local government agencies typically charge fees for occupancy permits, operating licenses and sales tax licenses, among other things. Your actual costs may vary based on the requirements of state and local government agencies. ![](_page_18_Picture_9.jpeg) ![](_page_19_Picture_0.jpeg) - 10. Professional Fees. You will need to employ an attorney, accountant/CPA and other consultants to assist you in establishing your Kidokinetics Business. These fees may vary from location to location depending upon the prevailing rates of local attorneys, accountants and consultants. - 11. Software License Fee. You must pay us a $3,000 software license fee for our proprietary KIDOLINK software when you sign the Franchise Agreement. See Item 5 for more details about this fee. - 12. Additional Funds. The estimate of additional funds is calculated for an initial period of three months. These expenses include advertising, storage locker rent and Technology Fees, but do not include owner's salary or draw. The high end includes an estimate for three months' salary for a full-time Manager. - 13. Our estimates are based on our experience and the experience of our affiliates in establishing Kidokinetics Businesses, and our current requirements for Kidokinetics Franchises. #### **Multi-Franchise** [Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package ("Initial Marketing Package") when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. [Item 5: INITIAL FEES] If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. ![](_page_11_Picture_0.jpeg) #### Software License Fee You must pay us a software licensing fee ("Software License Fee") for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of $3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the "Software License Agreement," the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of $7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------| -----------| -----------| --------------------------------------| --------------------| --------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | $100,000 | $170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | $50,500 | $84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | $12,000 | $19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | $162,500 | $204,200 | Per Table Above | Per Table Above | Per Table Above | [Item 7: ESTIMATED INITIAL INVESTMENT] #### Notes: These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating multiple Kidokinetics Business. We do not offer direct or indirect financing for these items. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for deposits and other payments. - 1. Initial Franchise Fee. If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. These initial fees are described in greater detail in Item 5 of this Franchise Disclosure Document. - 2. Initial Investment. See the table for Single Franchises in this Item 7 for more details on the initial investment for the first Kidokinetics Business. In addition to the costs for the first Kidokinetics Business, if you purchase additional Kidokinetics Businesses, you will only pay the Initial Franchise Fee, a reduced Initial Marketing Package Fee of $1,000 for each Kidokinetic Business, a reduced Software License fee of $1,000 for each additional Kidokinetics Business and you must also have an additional $10,000 in Additional Funds. You may also elect to pay the Enhanced Business Coaching and Training Services for an additional Kidokinetics Business. - 3. This is an estimate of your initial start-up expenses for operating under multiple franchise agreements in multiple territories. You should review these figures carefully with a business advisor before making any decision to purchase the Franchise(s).

Question 26

How does the Kidokinetics initial franchise fee (Item 5) compare to the estimated costs for equipment and supplies (Item 7)?

Accepted Answer

[Item 5: INITIAL FEES] #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. [Item 7: ESTIMATED INITIAL INVESTMENT] - 2. Furniture, Fixtures & Equipment. You must purchase (or lease) furniture, fixtures and equipment such as a desk, chair, filing cabinet, bookcase of shelving, etc. and a workspace with computer workstation with printer/fax/scanner. Although some of these items may be leased, the range This estimate includes purchase of a Computer System which we estimate to be between $500 and $1,500. - 5. Initial Inventory. You must purchase an initial inventory of play equipment, including balls of all types, fitness dice, lacrosse set, polyspots, juggling scarves, Little Tikes golf clubs, mini basketball hoops, baseball bases and bats, T-ball set, bowling set of pins and balls, tunnels, rope, footballs, bean bags, Frisbees, plastic cones, jump ropes, potato sacks, egg and spoon set, hula hoops, nets and goals, volleyballs, parachutes, hockey pucks and sticks, badminton sets, tennis racquets, etc. - 8. Initial Marketing Package. You must pay us $5,000 before opening for initial marketing materials and website updates for your first Franchise. - 11. Software License Fee. You must pay us a $3,000 software license fee for our proprietary KIDOLINK software when you sign the Franchise Agreement. See Item 5 for more details about this fee.

Question 27

How does the Kidokinetics initial franchise fee (Item 5) compare to the total estimated initial investment (Item 7), and what portion of the investment is refundable?

Accepted Answer

ranchise** | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | \$100,000 | \$170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | \$50,500 | \$84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | \$12,000 | \$19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | \$162,500 | \$204,200 | Per Table Above | Per Table Above | Per Table Above | ![](_page_20_Picture_0.jpeg) | Type of | Amor | unt | Method | | To Whom | |------------------------------------------------------------------------|-----------|-----------|--------------------|--------------------|-----------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | TOTAL ESTIMATED INITIAL INVESTMENT FOR THREE FRANCHISES ⁽²⁾ | \$209,500 | \$258,700 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR FOUR FRANCHISES ⁽²⁾ | \$256,500 | \$313,200 | Per Table Above | Per Table Above | Per Table Above | #### Notes: These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating multiple Kidokinetics Business. We do not offer direct or indirect financing for these items. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for deposits and other payments. - 1. Initial Franchise Fee. If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) \$60,000 for the first Franchise Agreement; (b) \$40,000 for the second Franchise Agreement; and (c) \$35,000 under the third and fourth Franchise Agreements.

Question 28

How does the Kidokinetics initial franchise fee (Item 5) compare to the total estimated initial investment (Item 7), and what portion of the investment is refundable, and what are the conditions for a refund?

Accepted Answer

ranchise** | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | \$100,000 | \$170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | \$50,500 | \$84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | \$12,000 | \$19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | \$162,500 | \$204,200 | Per Table Above | Per Table Above | Per Table Above | ![](_page_20_Picture_0.jpeg) | Type of | Amor | unt | Method | | To Whom | |------------------------------------------------------------------------|-----------|-----------|--------------------|--------------------|-----------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | TOTAL ESTIMATED INITIAL INVESTMENT FOR THREE FRANCHISES ⁽²⁾ | \$209,500 | \$258,700 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR FOUR FRANCHISES ⁽²⁾ | \$256,500 | \$313,200 | Per Table Above | Per Table Above | Per Table Above | #### Notes: These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating multiple Kidokinetics Business. We do not offer direct or indirect financing for these items. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for deposits and other payments. - 1. Initial Franchise Fee. If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) \$60,000 for the first Franchise Agreement; (b) \$40,000 for the second Franchise Agreement; and (c) \$35,000 under the third and fourth Franchise Agreements. These initial fees are described in greater detail in Item 5 of this Franchise Disclosure Document. - 2. Initial Investment. See the table for Single Franchises in this Item 7 for more details on the initial investment for the first Kidokinetics Business. In addition to the costs for the first Kidokinetics Business, if you purchase additional Kidokinetics Businesses, you will only pay the Initial Franchise Fee, a reduced Initial Marketing Package Fee of \$1,000 for each Kidokinetic Business, a reduced Software License fee of \$1,000 for each additional Kidokinetics Business and you must also have an additional \$10,000 in Additional Funds. You may also elect to pay the Enhanced Business Coaching and Training Services for an additional Kidokinetics Business. - 3. This is an estimate of your initial start-up expenses for operating under multiple franchise agreements in multiple territories. You should review these figures carefully with a business advisor before making any decision to purchase the Franchise(s). ![](_page_20_Picture_7.jpeg) ![](_page_21_Picture_0.jpeg) #### ITEM 8.

Question 29

How does the initial franchise fee for Kidokinetics (Item 5) relate to the total estimated initial investment (Item 7)?

Accepted Answer

ranchise** | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | \$100,000 | \$170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | \$50,500 | \$84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | \$12,000 | \$19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | \$162,500 | \$204,200 | Per Table Above | Per Table Above | Per Tab

Question 30

How does the initial investment for a Kidokinetics franchise (Item 7) relate to the initial franchise fee (Item 5) and other startup costs?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT] #### Notes: These estimated initial expenses are our best estimate of the costs you may incur in establishing and operating your Kidokinetics Business. We do not offer direct or indirect financing for these items. All expenditures paid to us or our affiliates are uniform and non-refundable under any circumstances once paid. All expenses payable to third parties are non-refundable, except as you may arrange for deposits and other payments. - 1. Initial Franchise Fee and Initial Enhanced Business Coaching and Training. These initial fees are described in greater detail in Item 5 of this Franchise Disclosure Document. - 2. Furniture, Fixtures & Equipment. You must purchase (or lease) furniture, fixtures and equipment such as a desk, chair, filing cabinet, bookcase of shelving, etc. and a workspace with computer workstation with printer/fax/scanner. Although some of these items may be leased, the range ![](_page_17_Picture_6.jpeg) ![](_page_18_Picture_0.jpeg) - shown represents an estimated purchase price. This estimate includes purchase of a Computer System which we estimate to be between $500 and $1,500. - 3. Insurance. You must obtain and maintain, at your own expense, the insurance coverage we require, and satisfy other insurance-related obligations. Please note that if you have had prior issues or claims from previous operations unrelated to the operation of a Kidokinetics Business, your rates may be significantly higher than those estimated above. - 4. Office Equipment and Supplies. You must purchase general office supplies including stationery, business cards and typical office equipment. Factors that may affect your cost of office equipment and supplies include local market conditions, competition among suppliers and other factors. We do not know if the amounts you pay for office equipment and supplies are refundable. You should inquire about the return and refund policy of the supplier at or before the time of purchase. Factors that may affect your cost of office equipment and supplies include local market conditions, competition among suppliers and other factors. - 5. Initial Inventory. You must purchase an initial inventory of play equipment, including balls of all types, fitness dice, lacrosse set, polyspots, juggling scarves, Little Tikes golf clubs, mini basketball hoops, baseball bases and bats, T-ball set, bowling set of pins and balls, tunnels, rope, footballs, bean bags, Frisbees, plastic cones, jump ropes, potato sacks, egg and spoon set, hula hoops, nets and goals, volleyballs, parachutes, hockey pucks and sticks, badminton sets, tennis racquets, etc. The cost of these items may vary based on manufacturers' discounts and specials at the time of purchase and other factors. We do not know if the amounts you pay for inventory items are refundable. You should inquire about the return and refund policy of the suppliers at or before the time of purchase. - 6. Training. The cost of training is included in the Initial Franchise Fee, but you are responsible for transportation and expenses for meals and lodging while attending training. The total cost will vary depending on the number of people attending, how far you travel and the type of accommodation you choose. - 7. Vehicle. You must have a vehicle capable of transporting play equipment. You may use a vehicle that you already own. If you do not already have an appropriate vehicle to travel to/from customer locations, you will need to lease an appropriate vehicle. The low cost assumes you already have a suitable vehicle, and the high cost represents the estimated maximum cost to lease an appropriate SUV or equivalent vehicle. - 8. Initial Marketing Package. You must pay us $5,000 before opening for initial marketing materials and website updates for your first Franchise. If you open additional Kidokinetics Businesses, you will pay us $1,000 for each Kidokinetics Business. See Item 5 for more details about this fee. - 9. Licenses & Permits. State and local government agencies typically charge fees for occupancy permits, operating licenses and sales tax licenses, among other things. Your actual costs may vary based on the requirements of state and local government agencies. ![](_page_18_Picture_9.jpeg) ![](_page_19_Picture_0.jpeg) - 10. Professional Fees. You will need to employ an attorney, accountant/CPA and other consultants to assist you in establishing your Kidokinetics Business. These fees may vary from location to location depending upon the prevailing rates of local attorneys, accountants and consultants. - 11. Software License Fee. You must pay us a $3,000 software license fee for our proprietary KIDOLINK software when you sign the Franchise Agreement. See Item 5 for more details about this fee. - 12. Additional Funds. The estimate of additional funds is calculated for an initial period of three months. These expenses include advertising, storage locker rent and Technology Fees, but do not include owner's salary or draw. The high end includes an estimate for three months' salary for a full-time Manager. - 13. Our estimates are based on our experience and the experience of our affiliates in establishing Kidokinetics Businesses, and our current requirements for Kidokinetics Franchises. #### **Multi-Franchise** | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | $100,000 | $170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | $50,500 | $84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | $12,000 | $19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | $162,500 | $204,200 | Per Table Above | Per Table Above | Per Table Above | [Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open.

Question 31

What are the initial and ongoing fees associated with a Kidokinetics franchise (Items 5 and 6) and what services or support do these fees cover (Item 11)?

Accepted Answer

[Item 5: INITIAL FEES] #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package ("Initial Marketing Package") when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. You must pay us a software licensing fee ("Software License Fee") for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of $3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the "Software License Agreement," the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of $7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. The Enhanced Business Coaching and Training Fee covers costs and expenses (including our administrative and overhead expenses) associated with providing Enhanced Business Coaching and Training Services for your Kidokinetics Business. The Enhanced Business Coaching and Training Fee is uniform and non-refundable under any circumstances. We currently provide the Enhanced Business Coaching and Training Services directly but may designate an affiliate to provide the Enhanced Business Coaching and Training Services in the future. Enhanced Business Coaching and Training Fee is intended to be fully applied within six months of signing the Franchise Agreement, but the Enhanced Business Coaching Training Services may be provided at a later date or otherwise extended upon our mutual written agreement. 5.5. Recurring Fees. Kidokinetics 5.5.1. Royalty. On Wednesday of each week (or such other date as we designate, you agree to pay us a royalty fee equal to eight percent (8%) of Gross Sales during the previous week (Monday through Sunday) ("Percentage Royalty"). At the end of [Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING] #### Other Assistance During the Operation of The Kidokinetics Business During the operation of your Kidokinetics Business, we (or our designee) will: - 1. Upon reasonable request, provide advice regarding your Kidokinetics Business's operation based on reports or inspections. Advice will be given during our regular business hours and via written materials, electronic media, telephone or other methods in our discretion (Franchise Agreement, Section 9.1). - 2. Offer from time to time, in our sole discretion, mandatory or optional additional training programs. If we require it, you must attend any mandatory additional training for up to 5 days each year at a location we designate. You must pay our then-current additional training fees (currently $500 per person per day). You must pay for your travel, transportation, lodging, meals and other expenses to attend any mandatory training program (Franchise Agreement, Section 6.5). - 3. Schedule, in our discretion, a national business meeting or convention for up to 3 days per year at a location we designate. If we schedule any national business meeting or convention, you must attend and you must pay us a registration fee per attendee as we designate. You are also responsible for paying for your transportation, lodging, meals and other expenses to attend any national business meeting or convention (Franchise Agreement, Section 6.5). - 4. Upon your request, or as we determine to be appropriate, provide remedial on-site training and assistance at your premises. If you request on-site remedial training, we may charge a per diem fee, currently $500 per person per day, for the services of our trainer. You will pay any travel-related expenses of the trainer, including transportation, meals and lodging (Franchise Agreement, Section 6.6). - 5. Upon your request, provide individualized assistance to you within reasonable through written materials, electronic media, telephone or other methods in our discretion, subject at all times to availability of our personnel and a reasonable limit (Franchise Agreement, Section 6.7).

Question 32

What are the initial and ongoing fees associated with a Kidokinetics franchise (Items 5 and 6) and what services or support do these fees cover (Item 11), and what is the process for disputing these fees?

Accepted Answer

[Item 5: INITIAL FEES] #### Initial Franchise Fee The initial franchise fee (“Initial Franchise Fee”) for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) (“Multi-Franchise”). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package (“Initial Marketing Package”) when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. #### Software License Fee You must pay us a software licensing fee (“Software License Fee”) for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of $3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the “Software License Agreement,” the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of $7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. The Enhanced Business Coaching and Training Fee covers costs and expenses (including our administrative and overhead expenses) associated with providing Enhanced Business Coaching and Training Services for your Kidokinetics Business. The Enhanced Business Coaching and Training Fee is uniform and non-refundable under any circumstances. We currently provide the Enhanced Business Coaching and Training Services directly but may designate an affiliate to provide the Enhanced Business Coaching and Training Services in the future. Enhanced Business Coaching and Training Fee is intended to be fully applied within six months of signing the Franchise Agreement, but the Enhanced Business Coaching Training Services may be provided at a later date or otherwise extended upon our mutual written agreement. [Item 6: OTHER FEES] ![](_page_14_Picture_2.jpeg) ![](_page_15_Picture_0.jpeg) - Fees. All fees paid to us or our affiliates are uniform and not refundable under any circumstances 1. once paid. Fees paid to vendors or other suppliers may be refundable depending on the vendors and suppliers. We currently require you to pay fees and other amounts due to us or our affiliates via electronic funds transfer ("EFT") or other similar means. You are required to complete the ACH authorization (in the form attached to this Franchise Disclosure Document in Exhibit H). We can require an alternative payment method or payment frequency for any fees or amounts owed to us or our affiliates under the Franchise Agreement. If you purchase multiple Kidokinetics Businesses, the fees indicated in the chart above are the fees charged and/or incurred for each Kidokinetics Businesses except as otherwise noted. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. Also, any fee expressed as a fixed dollar amount is subject to adjustment based on changes to the Consumer Price Index ("CPI") in the United States. We may periodically review and increase these fees based on changes to the CPI (in addition to any other increase), but only if the increase to the CPI is more than 5% higher than the corresponding CPI in effect on: (a) the effective date of your Franchise Agreement (for the initial fee adjustments); or (b) the date we implemented the last fee adjustment (for subsequent fee adjustments). We will notify you of any CPI adjustment at least 60 days before the fee adjustment becomes effective. We will implement no more than one CPI-related fee adjustment during any calendar year. [Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING] #### Other Assistance During the Operation of The Kidokinetics Business During the operation of your Kidokinetics Business, we (or our designee) will: - 1. Upon reasonable request, provide advice regarding your Kidokinetics Business's operation based on reports or inspections. Advice will be given during our regular business hours and via written materials, electronic media, telephone or other methods in our discretion (Franchise Agreement, Section 9.1). - 2. Offer from time to time, in our sole discretion, mandatory or optional additional training programs. If we require it, you must attend any mandatory additional training for up to 5 days each year at a location we designate. You must pay our then-current additional training fees (currently $500 per person per day). You must pay for your travel, transportation, lodging, meals and other expenses to attend any mandatory training program (Franchise Agreement, Section 6.5). - 3. Schedule, in our discretion, a national business meeting or convention for up to 3 days per year at a location we designate. If we schedule any national business meeting or convention, you must attend and you must pay us a registration fee per attendee as we designate. You are also responsible for paying for your transportation, lodging, meals and other expenses to attend any national business meeting or convention (Franchise Agreement, Section 6.5). - 4. Upon your request, or as we determine to be appropriate, provide remedial on-site training and assistance at your premises. If you request on-site remedial training, we may charge a per diem fee, currently $500 per person per day, for the services of our trainer. You will pay any travel-related expenses of the trainer, including transportation, meals and lodging (Franchise Agreement, Section 6.6). - 5. Upon your request, provide individualized assistance to you within reasonable through written materials, electronic media, telephone or other methods in our discretion, subject at all times to availability of our personnel and a reasonable limit (Franchise Agreement, Section 6.7).

Question 33

How does the non-refundable initial franchise fee for Kidokinetics (Item 5) compare to the ongoing royalty fees described in Item 6?

Accepted Answer

[Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. 5.5.1. Royalty. On Wednesday of each week (or such other date as we designate, you agree to pay us a royalty fee equal to eight percent (8%) of Gross Sales during the previous week (Monday through Sunday) ("Percentage Royalty"). At the end of the month, if the Percentage Royalty for that month is less than the minimum royalty in the chart below, you will pay us the difference ("Minimum Royalty") to meet your Minimum Royalty obligation. You will receive a 90-day grace period ("Grace Period"), beginning on the day you successfully complete the initial training class, before you are required to begin paying the Minimum Royalty, but the Percentage Royalty will be in effect immediately.

Question 34

What is the relationship between the initial fees (Item 5) and ongoing fees (Item 6) for a Kidokinetics franchise, and what services do they cover (Item 11)?

Accepted Answer

[Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee ("Initial Franchise Fee") for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) ("Multi-Franchise"). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package ("Initial Marketing Package") when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. --- [Item 5: INITIAL FEES] If you purchase a Multi-Franchise or purchase additional Franchises, you will pay us $1,000 for the Initial Marketing Package for each additional Kidokinetics Business you open. The Initial Marketing Package for additional Franchises includes a direct marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for additional Franchises is uniform and non-refundable and is due when you enter into the franchise agreement for the additional Franchise. ![](_page_11_Picture_0.jpeg) #### Software License Fee You must pay us a software licensing fee ("Software License Fee") for our proprietary KIDOLINK software for each Kidokinetics Business you operate. You will pay us a Software License Fee of $3,000 when you sign your first Franchise Agreement for our proprietary business management software. This fee is uniform and non-refundable. You must also sign the "Software License Agreement," the form of which is attached to this Franchise Disclosure Document in Exhibit H, when you sign the Franchise Agreement. If you purchase a Multi-Franchise or additional Kidokinetics Businesses, you will pay us $1,000 for the Software License Fee for each additional Kidokinetics Business you open. The Software License Fee for additional Kidokinetics Business is uniform and non-refundable and is due when you enter into the Franchise Agreement for the additional Kidokinetics Business. #### **Enhanced Business Coaching and Training Services** If you are purchasing your first Kidokinetics Business, you will be required to pay a fee of $7,500 for certain opening support services (the "Enhanced Business Coaching and Training Fee"). The Enhanced Business Coaching and Training Fee includes two days of in-person business coaching and training services ("Enhanced Business Coaching and Training Services") within your Territory (as defined in Item 12). If you purchase additional Kidokinetics Business, you are not required to buy the Enhanced Business Coaching and Training Services, but you can choose to pay the Enhanced Business Coaching and Training Fee if you want optional Enhanced Business Coaching and Training in your Area. This fee is due upon signing the Franchise Agreement. --- The Enhanced Business Coaching and Training Fee covers costs and expenses (including our administrative and overhead expenses) associated with providing Enhanced Business Coaching and Training Services for your Kidokinetics Business. The Enhanced Business Coaching and Training Fee is uniform and non-refundable under any circumstances. We currently provide the Enhanced Business Coaching and Training Services directly but may designate an affiliate to provide the Enhanced Business Coaching and Training Services in the future. Enhanced Business Coaching and Training Fee is intended to be fully applied within six months of signing the Franchise Agreement, but the Enhanced Business Coaching Training Services may be provided at a later date or otherwise extended upon our mutual written agreement. #### Financial Assurances Some states have imposed a financial assurance. Please refer to the State Addendum in Exhibit G to the Franchise Disclosure Document ![](_page_11_Picture_8.jpeg) ![](_page_12_Picture_0.jpeg) --- [Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING] #### Other Assistance During the Operation of The Kidokinetics Business During the operation of your Kidokinetics Business, we (or our designee) will: - 1. Upon reasonable request, provide advice regarding your Kidokinetics Business's operation based on reports or inspections. Advice will be given during our regular business hours and via written materials, electronic media, telephone or other methods in our discretion (Franchise Agreement, Section 9.1). - 2. Offer from time to time, in our sole discretion, mandatory or optional additional training programs. If we require it, you must attend any mandatory additional training for up to 5 days each year at a location we designate. You must pay our then-current additional training fees (currently $500 per person per day). You must pay for your travel, transportation, lodging, meals and other expenses to attend any mandatory training program (Franchise Agreement, Section 6.5). ![](_page_26_Picture_10.jpeg) ![](_page_27_Picture_0.jpeg) - 3. Schedule, in our discretion, a national business meeting or convention for up to 3 days per year at a location we designate. If we schedule any national business meeting or convention, you must attend and you must pay us a registration fee per attendee as we designate. You are also responsible for paying for your transportation, lodging, meals and other expenses to attend any national business meeting or convention (Franchise Agreement, Section 6.5). - 4. Upon your request, or as we determine to be appropriate, provide remedial on-site training and assistance at your premises. If you request on-site remedial training, we may charge a per diem fee, currently $500 per person per day, for the services of our trainer. You will pay any travel-related expenses of the trainer, including transportation, meals and lodging (Franchise Agreement, Section 6.6). - 5. Upon your request, provide individualized assistance to you within reasonable through written materials, electronic media, telephone or other methods in our discretion, subject at all times to availability of our personnel and a reasonable limit (Franchise Agreement, Section 6.7). - 6. --- ![](_page_14_Picture_2.jpeg) ![](_page_15_Picture_0.jpeg) - Fees. All fees paid to us or our affiliates are uniform and not refundable under any circumstances 1. once paid. Fees paid to vendors or other suppliers may be refundable depending on the vendors and suppliers. We currently require you to pay fees and other amounts due to us or our affiliates via electronic funds transfer ("EFT") or other similar means. You are required to complete the ACH authorization (in the form attached to this Franchise Disclosure Document in Exhibit H). We can require an alternative payment method or payment frequency for any fees or amounts owed to us or our affiliates under the Franchise Agreement. If you purchase multiple Kidokinetics Businesses, the fees indicated in the chart above are the fees charged and/or incurred for each Kidokinetics Businesses except as otherwise noted. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. All fees are current as of the Issuance Date of this Franchise Disclosure Document. Certain fees that we have indicated may increase over the term of the Franchise Agreement. Also, any fee expressed as a fixed dollar amount is subject to adjustment based on changes to the Consumer Price Index ("CPI") in the United States. We may periodically review and increase these fees based on changes to the CPI (in addition to any other increase), but only if the increase to the CPI is more than 5% higher than the corresponding CPI in effect on: (a) the effective date of your Franchise Agreement (for the initial fee adjustments); or (b) the date we implemented the last fee adjustment (for subsequent fee adjustments). We will notify you of any CPI adjustment at least 60 days before the fee adjustment becomes effective. We will implement no more than one CPI-related fee adjustment during any calendar year.

Question 35

What is the relationship between the initial franchise fee for Kidokinetics (Item 5) and the ongoing royalty fees (Item 6) in terms of what services they cover?

Accepted Answer

[Item 5: INITIAL FEES] #### ITEM 5. INITIAL FEES #### Initial Franchise Fee The initial franchise fee (“Initial Franchise Fee”) for a Kidokinetics Business is $60,000. The Initial Franchise Fee is paid to us in a lump sum when you sign the Franchise Agreement and is non-refundable. The Initial Franchise Fee is payment, in part, for expenses incurred by us in furnishing assistance and services to you and for costs incurred by us, including general sales and marketing expenses, training, legal, accounting and other professional fees. We may also allow franchisees, in our discretion, to purchase multiple franchises (up to four) (“Multi-Franchise”). If you purchase a Multi-Franchise, you will enter into separate Franchise Agreements for each Franchise and pay a reduced Initial Franchise Fee for the additional Franchises: (a) $60,000 for the first Franchise Agreement; (b) $40,000 for the second Franchise Agreement; and (c) $35,000 under the third and fourth Franchise Agreements. We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount. The Initial Franchise Fee is uniform for all franchisees offered a Franchise under this Franchise Disclosure Document as described above. During our last fiscal year which ended December 31, 2023, we collected Initial Franchise Fee ranging from $17,500 (for a Franchise sold to one of our officers) to $60,000. #### Initial Marketing Package We will provide an initial marketing package (“Initial Marketing Package”) when you sign your Franchise Agreement. You will pay us $5,000 for the Initial Marketing Package for your first Franchise and it includes updating the Kidokinetics website and social media to incorporate reference to your Kidokinetics Business, two whip banners, a package of collateral materials, a local press release, and a direct mail marketing campaign targeting institutional client opportunities. This fee for the Initial Marketing Package for your first Franchise is uniform and non-refundable and is due when you enter into your first Franchise Agreement. --- [Item 6: OTHER FEES] - 5.5. Recurring Fees. Kidokinetics ![](_page_67_Picture_0.jpeg) 5.5.1. Royalty. On Wednesday of each week (or such other date as we designate, you agree to pay us a royalty fee equal to eight percent (8%) of Gross Sales during the previous week (Monday through Sunday) ("Percentage Royalty"). At the end of the month, if the Percentage Royalty for that month is less than the minimum royalty in the chart below, you will pay us the difference ("Minimum Royalty") to meet your Minimum Royalty obligation. You will receive a 90-day grace period ("Grace Period"), beginning on the day you successfully complete the initial training class, before you are required to begin paying the Minimum Royalty, but the Percentage Royalty will be in effect immediately. The Minimum Royalty is as follows:

Question 36

What is the total estimated initial investment for a Kidokinetics franchise (Item 7) and how does it relate to the initial franchise fee (Item 5)?

Accepted Answer

ranchise** | Type of | Amou | unt | Method | | To Whom | |-----------------------------------------------------------------------------------|-----------|-----------|--------------------------------------|--------------------|--------------------------------------| | Expenditure | Low | High | of Payment | When Due | Payment is to be Paid | | Initial Franchise | \$100,000 | \$170,000 | Upon Signing the Franchise Agreement | Us | Upon Signing the Franchise Agreement | | Fee ⁽¹⁾ | | | | | | | Initial Investment for First Kidokinetics Business ⁽²⁾ | \$50,500 | \$84,700 | Per Table Above | Per Table Above | Per Table Above | | Initial Investment for Additional Kidokinetics Businesses ⁽²⁾ | \$12,000 | \$19,500 | Per Table Above | Per Table Above | Per Table Above | | TOTAL ESTIMATED INITIAL INVESTMENT FOR TWO FRANCHISES (2) | \$162,500 | \$204,200 | Per Table Above | Per Table Above | Per Tab

Question 37

What types of businesses will a Kidokinetics franchisee compete with?

Accepted Answer

Our concept is targeted at young children. Our services are not seasonal in nature. The child sports and fitness industry is competitive and well developed. As a franchisee, you will compete with a variety of other businesses, including those that offer exercise programs to young children. Your competition may be local, independent businesses or may be part of a regional or national chain or franchise. You may also encounter competition from other Kidokinetics Businesses operated by us, our affiliates or other franchisees. Demand for the services you offer may be dependent on the local and national economic conditions' effect on the public's discretionary spending.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–9)

Question 38

What documentation is required to receive the veteran's discount on the Kidokinetics Initial Franchise Fee?

Accepted Answer

We currently offer a reduced Initial Franchise Fee for veterans. Under this program, honorably discharged United States veterans or their spouses receive a 5% discount on our Initial Franchise Fee for each Kidokinetics Franchise they purchase. You are required to provide us with a copy of your DD214 to receive this discount.

Source: Item 5 — INITIAL FEES (FDD pages 11–13)

Question 39

Under what condition is a Kidokinetics franchisee prohibited from operating outside their designated territory?

Accepted Answer

Franchisee may not operate outside the Territory without express written authorization from Franchisor.

Source: Item 22 — CONTRACTS (FDD page 59)

Question 40

Does the Kidokinetics 'Approval of Requested Assignment' specify the type of business entity the New Franchisee must be?

Accepted Answer

| This Approval of Requested Assignment ("Agreement") is entered into this day of, 20, between Kidokinetics Franchise LLC ("Franchisor"), a                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Florida limited liability company, ("Former Franchisee"), the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Florida limited liability company, ("Former Franchisee"), the undersigned owners of Former Franchisee ("Owners") and, a                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| [a/an Formation State] [corporation/limited liability company]"_("New Franchisee").

Source: Item 22 — CONTRACTS (FDD page 59)

Question 41

Does Kidokinetics have to approve the franchisee to provide training to a replacement or successor manager to avoid a fee?

Accepted Answer

to Franchisor's sole and complete satisfaction. Franchisor also reserves the right to charge a reasonable fee for any initial training provided by Franchisor to any replacement or successor Manager, if Franchisee is not approved by Franchisor to provide such training. Franchisor's current training tuition fee is \$500 per person per day, but may be adjusted at Franchisor's sole discretion. Franchisee further will be responsible for any and all incidental expenses incurred by Franchisee or Franchisee's personnel in connection with initial or subsequent training, including, without limit

Source: Item 22 — CONTRACTS (FDD page 59)

Question 42

What are the consequences if a Kidokinetics franchisee fails to execute the then-current form of franchise agreement for renewal?

Accepted Answer

|    | Provision                                      | Franchise or Other | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----|------------------------------------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                | Agreement          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| b. | Renewal or extension of the term               | Article 4          | You may renew for one additional term of 10 years, subject to our renewal requirements. If you fail to meet any one of these conditions, we may refuse to renew or extend the terms of your Franchise Agreement.                                                                                                                                                                                                                                                                                                                                                                                              |
| c. | Requirements for franchisee to renew or extend | Article 4          | Be in full compliance, provide written notice to us at least 90 days, but not more than nine months, before the end of the term, update machinery, equipment, tools and vehicles as required, not be in default of any provision of the Franchise Agreement, satisfy all monetary obligations, execute our then-current form of franchise agreement (with materially different terms and conditions than your original Franchise Agreement), comply with then-current qualifications and training requirements, including completion of additional training, pay us a Renewal Fee, execute a general release.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)

Question 43

What are the consequences if a new manager of a Kidokinetics franchise does not complete the initial training program?

Accepted Answer

be required. If you appoint a new principal owner or transfer ownership, or if you hire a new Manager, that person must attend and successfully complete our initial training program before assuming responsibility for the management of your Kidokinetics Business. If we conduct an inspection of your Kidokinetics Business and determine you are not operating in compliance with the Franchise Agreement, we may require that you or your operating principal, Manager, managers and other employees attend remedial training that addresses your operational deficiencies. You may also request that we provide additional training (either at corporate headquarters or at your Kidokinetics Business). You must pay us \$500 per attendee per day for additional training, and you must pay for airfare, meals, transportation costs, lodging and incidental expenses for all of your training program attendees. If we determine that you are not operating your Kidokinetics Business in compliance with the Franchise Agreement or the Operations Manual, we may require that you or your principal owner, designated managers and other employees attend remedial training. If the training program is conducted at your Kidokinetics Business, you must reimburse us for the expenses we or our representatives incur in providing the training. #### ITEM 12. TERRITORY You and we will agree on your territory before you sign the Franchise Agreement. You will not receive an exclusive territory ("Territory"). Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–34)

Question 44

What constitutes a 'default' of a provision in the Franchise Agreement that would prevent a Kidokinetics franchisee from renewing?

Accepted Answer

RELATIONSHIP

|    | Provision                                      | Franchise or Other | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----|------------------------------------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                | Agreement          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| a. | Length of the franchise term                   | Article 3          | The initial term is 10 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| b. | Renewal or extension of the term               | Article 4          | You may renew for one additional term of 10 years, subject to our renewal requirements. If you fail to meet any one of these conditions, we may refuse to renew or extend the terms of your Franchise Agreement.                                                                                                                                                                                                                                                                                                                                                                                              |
| c. | Requirements for franchisee to renew or extend | Article 4          | Be in full compliance, provide written notice to us at least 90 days, but not more than nine months, before the end of the term, update machinery, equipment, tools and vehicles as required, not be in default of any provision of the Franchise Agreement, satisfy all monetary obligations, execute our then-current form of franchise agreement (with materially different terms and conditions than your original Franchise Agreement), comply with then-current qualifications and training requirements, including completion of additional training, pay us a Renewal Fee, execute a general release. |
| d. | Termination by franchisee                      | None               | Not applicable. You may not terminate the Franchise Agreement. (Subject to applicable state law).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| e. | Termination by Franchisor without cause        | None               | Not applicable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

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| Provision                                | Section In the Franchise or Other Agreement | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|------------------------------------------|---------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| f. Termination by Franchisor with cause  | Article 16                                  | We may terminate if you default for failure to comply with the obligations of the Franchise Agreement, or if you or an affiliate of yours defaults under any other agreement, including any other franchise agreement, with us or any of our affiliates, suppliers or landlord and do not cure the default within the time period provided in the other agreement. The Franchise Agreement describes defaults throughout. Please read it carefully.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| g. "Cause" defined- | Sections 16.3 and 16.4 | You have five days to cure non-payments.  You have 15 days to cure the following defaults: your failure to immediately endorse payments that are erroneously made to you; your failure to maintain prescribed days and hours of operations; your failure to personally supervise day-to-day operations; your failure to maintain the strict quality controls reasonably required by the Franchise Agreement and/or the Franchise Operations Manuals; and your failure to obtain or maintain any required licenses, certifications or permits. |
| curable defaults |  |  |
| h. "Cause" defined -non-curable defaults | Sections 16.1 and 16.2                      | The Franchise Agreement will terminate automatically, without notice for the following defaults: insolvency; bankruptcy; written admission of inability to pay debts; receivership; levy; composition with creditors; unsatisfied final judgment for more than 30 days; or foreclosure proceeding that is not dismissed within 30 days.  We may terminate the Franchise Agreement upon notice to you if you: fail to open the Kidokinetics Business within required time frames; falsify any report to us;

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)

Question 45

Are the contracts provided in Exhibit H of the Kidokinetics Franchise Disclosure Document subject to change?

Accepted Answer

The following contracts contained in Exhibit H are contracts that Franchisee is required to utilize or execute after signing the Franchise Agreement in the operation of the Kidokinetics Business. The following are the forms of contracts that Kidokinetics Franchise LLC uses as of the Issuance Date of this Franchise Disclosure Document. If they are marked "Sample," they are subject to change at any time. Source: Item 22 — CONTRACTS (FDD page 59)

Question 46

Can a Kidokinetics cooperative contribution exceed the Local Marketing Requirement?

Accepted Answer

If a Cooperative is established applicable to the Kidokinetics Business, Franchisee must participate in the Cooperative. Cooperative contributions will be credited towards the Local Marketing discussed in Section 12.2 above. Cooperative contributions will not exceed the Local Marketing Requirement unless a majority of the Cooperative votes to increase that requirement.

Source: Item 22 — CONTRACTS (FDD page 59)

Question 47

Is demand for Kidokinetics services dependent on economic conditions?

Accepted Answer

Demand for the services you offer may be dependent on the local and national economic conditions' effect on the public's discretionary spending.

Source: Item 1 — THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 8–9)

Question 48

In the event of a conflict between the terms of an Applicable Addenda and the Franchise Disclosure Document, Franchise Agreement, or other specified agreement(s) for Kidokinetics, which terms take precedence?

Accepted Answer

If any one of the preceding Addenda for specific states ("Addenda") is checked as an "Applicable Addenda" below, then that Addenda shall be incorporated into the Franchise Disclosure Document, Franchise Agreement and any other specified agreement(s) entered into by us and the undersigned Franchisee. To the extent any terms of an Applicable Addenda conflict with the terms of the Franchise Disclosure Document, Franchise Agreement and other specified agreement(s), the terms of the Applicable Addenda shall supersede the terms of the Franchise Agreement.

California Hawaii Illinois Iowa Indiana Maryland Michigan Minnesota New York North Dakota Ohio Rhode Island South Dakota Virginia Washington Wisconsin Dated: _, 20 KIDOKINETICS FRA NCHISE LLO C ·
Rev. 071823

Source: Item 23 — RECEIPT (FDD pages 59–205)

Question 49

To what extent are general release requirements deleted from the Kidokinetics Franchise Agreement in Minnesota?

Accepted Answer

Minnesota Rule 2860.4400(D) prohibits a franchisor from requiring a franchisee to assent to a general release.

As a result, the FDD and the Franchise Agreement, which require you to sign a general release prior to renewing or transferring your Franchise, are hereby deleted from the Franchise Agreement, to the extent required by Minnesota law.

Source: Item 23 — RECEIPT (FDD pages 59–205)

Question 50

Does the Kidokinetics FDD state that the actual financial results could differ from the estimates used in preparing the financial statements?

Accepted Answer

The preparation of financial statements in conformity with generally accepted accounting principles accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)

Question 51

Does the Kidokinetics Franchise Agreement allow the franchisor to operate or permit other franchisees to operate a Kidokinetics Business within the franchisee's territory?

Accepted Answer

ment and incorporated into this Agreement. Except as otherwise provided for in this Agreement, as long as Franchisee is in compliance with the terms and conditions hereof, Franchisor agrees it will not operate, nor permit any other franchisee to operate, a Kidokinetics Business within the Territory using the same Marks. Franchisee acknowledges that other franchisees may operate their Kidokinetics Businesses from home offices located within the Territory, however, such Franchisee shall not be granted the right to operate within the Territory. Franchisee may not operate outside the Territory without express written authorization from Franchisor.
- 2.2. Reservation of Rights. Franchisee acknowledges and agrees that Franchisor and any parties Franchisor designates will have the right to: (i) establish and operate, and license third parties the right to establish and operate, other franchised businesses using the Marks and System at any location outside of the Territory; (ii) acquire, merge with, engage in joint ventures with, or otherwise affiliate with, and thereafter own and operate and franchise others the right to own and operate, any business of any kind, including businesses that offer products that are similar to those provided by a Franchised Business, within or outside the Territory; (iii) open and operate, or license third parties the right to open or operate, businesses that offer products and services similar to the Franchised Business under marks other than the Marks at any location; (iv) sell and distribute, directly or indirectly, or license others to sell and distribute, directly or indirectly, any products, services or merchandise, from any location or to any purchaser, through any channel or method of distribution (including, but not limited, to virtual classes, sales made by or through telemarketing, and/or on the Internet); (v) provide the services or sell products authorized for Kidokinetics Businesses to customers whose principal residence (or principal business office, if the customer is a business entity) is within Franchisee's Territory if contact with the customer is initiated by the customer and not Franchisor; (vi) to use and license the use of technology to non-franchisee locations inside and outside the Territory; and (vii) engage in any other activities not expressly prohibited under this Agreement.

Source: Item 22 — CONTRACTS (FDD page 59)

Question 52

What must the Kidokinetics Franchisee do if there is a conflict between the Franchisor's privacy standards and applicable law?

Accepted Answer

If there is a conflict between Franchisor's standards and policies pertaining to Privacy Laws and actual applicable law, Franchisee will: (i) comply with the requirements of applicable law; (ii) immediately give Franchisor written notice of said conflict; and (iii) promptly and fully cooperate with Franchisor and its counsel in determining the most effective way, if any, to meet Franchisee agrees not to publish, disseminate, implement, revise, or rescind a data privacy policy without Franchisor's prior written consent as to said policy.

Source: Item 22 — CONTRACTS (FDD page 59)

Question 53

Can a Kidokinetics franchisee include research expenditures in their Local Marketing expenditures?

Accepted Answer

ing upon Franchisee.

#### 12.2. Local Marketing.

12.2.1. In addition to the ongoing advertising contributions set forth herein, Franchisee shall spend annually, throughout the term of this Agreement, the greater of \$500 or 2% of Gross Sales per

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month on a rolling 12-month average ("Local Marketing Requirement") on advertising for the Kidokinetics Business within the Territory ("Local Marketing"). Franchisee is not required to spend more than the Local Marketing Requirement, but there is no limit on the amount Franchisee may spend on local advertising. Franchisor does not impose an additional Local Marketing Requirement for a single franchisee operating up to four outlets if they are operated by the same legal entity and have adjacent territories. On or before the 1st day of February each year, Franchisee must submit to Franchisor a Local Marketing expenditure report accurately reflecting such expenditures for the preceding annual period. If that day is not a business day, then such report will be due on the next business day. The following costs and expenditures incurred by Franchisee will not be included in Franchisee's expenditures on Local Marketing for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; or (iv) charitable, political or other contributions or donations. We may require you to subscribe to the email marketing subscription program we designate, such as Constant Contact or other similar email marketing programs, at your sole cost and expense

Source: Item 22 — CONTRACTS (FDD page 59)

Question 54

Can a Kidokinetics franchisee be required to subscribe to an email marketing subscription program?

Accepted Answer

We may require you to subscribe to the email marketing subscription program we designate, such as Constant Contact or other similar email marketing programs, at your sole cost and expense. The fee for this is determined by the provider.

Source: Item 22 — CONTRACTS (FDD page 59)

Question 55

What are the franchisee's reimbursement obligations if Kidokinetics conducts remedial training at the franchisee's business location?

Accepted Answer

If we determine that you are not operating your Kidokinetics Business in compliance with the Franchise Agreement or the Operations Manual, we may require that you or your principal owner, designated managers and other employees attend remedial training. If the training program is conducted at your Kidokinetics Business, you must reimburse us for the expenses we or our representatives incur in providing the training.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–34)

Question 56

For Kidokinetics franchises in Minnesota, what happens to Franchise Agreement provisions that require franchisees to release liability imposed by Minnesota Statutes, Sections 80C.01 to 80C.22?

Accepted Answer

Despite anything to the contrary in the Franchise Agreement, the following provisions will supersede and apply to all Franchises offered and sold in the State of Minnesota:

- 1.

Any provision in the Franchise Agreement which would require you to assent to a release, assignment, novation or waiver that would relieve any person from liability imposed by Minnesota Statutes, Sections 80C.01 to 80C.22 will be void to the extent that such contractual provision violates such law.

- 2.

Minnesota Statute Section 80C.21 and Minnesota Rule 2860.4400J prohibit the franchisor from requiring litigation to be conducted outside of Minnesota.

In addition, nothing in the FDD or Franchise Agreement can abrogate or reduce any of your rights as provided for in Minnesota Statutes, Chapter 80C, or your rights to any procedure, forum, or remedies provided for by the laws of Minnesota.

Source: Item 23 — RECEIPT (FDD pages 59–205)

Question 57

Can the Kidokinetics Franchisor withhold consent regarding the activities of the Franchisee?

Accepted Answer

idokinetics Business Location and the Territory;
  - 10.2.3. Franchisee's organizational documents will, at all times, provide that the activities of Franchisee are confined exclusively to the operation of the Franchised Business granted herein, unless otherwise consented to in writing by Franchisor, which consent may be withheld by Franchisor in Franchisor's sole discretion;
  - 10.2.4. The execution of this Agreement and the consummation of the transactions contemplated in this Agreement are within Franchisee's power and have been duly authorized by Franchisee;
  - 10.2.5. Copies of Franchisee's organizational documents, other governing documents, resolutions or consents of the governing board authorizing entry into and performance of this Agreement, and any certificates, buy-sell agreements or other documents restricting the sale or transfer of equity interests in Franchisee, and any other documents as may be reasonably required by Franchisor will be

Source: Item 22 — CONTRACTS (FDD page 59)

Question 58

What happens to the Kidokinetics FDD and Franchise Agreement provisions requiring a general release prior to renewal or transfer in Minnesota?

Accepted Answer

Minnesota Rule 2860.4400(D) prohibits a franchisor from requiring a franchisee to assent to a general release.

As a result, the FDD and the Franchise Agreement, which require you to sign a general release prior to renewing or transferring your Franchise, are hereby deleted from the Franchise Agreement, to the extent required by Minnesota law.

Source: Item 23 — RECEIPT (FDD pages 59–205)

Question 59

What happens if Kidokinetics fails to respond within the specified timeframe regarding a franchisee's request to use their own advertising materials?

Accepted Answer

You must order sales and marketing material from us or our designated suppliers. It is a material breach of the Franchise Agreement to use other marketing material without obtaining our prior written approval. If you desire to use your own advertising materials, including your own website, you must obtain our prior approval, which may be granted or denied in our sole discretion. We will review your request and we will respond in writing within 30 days from the date we receive all requested information. Our failure to notify you in the specified time frame will be deemed a disapproval of your request. Use of logos, Marks and other name identification materials must follow our approved standards. You may not use our logos, Marks and other name identification materials on items to be sold or services to be provided without our prior written approval.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–34)

Question 60

What happens if a Kidokinetics franchisee fails to maintain the required computer systems?

Accepted Answer

- 16.4.4.

Franchisee fails to maintain the strict quality controls reasonably required by this Agreement and/or the Franchise Operations Manual.

Source: Item 22 — CONTRACTS (FDD page 59)

Question 61

What happens if a Kidokinetics franchisee fails to maintain sufficient working capital?

Accepted Answer

Franchisee will, at all times, maintain sufficient working capital to fulfill its obligations under this Agreement; and - 11.1.16. At all times, maintain such working capital as may be reasonably necessary to enable Franchisee to properly and fully carry out and perform all of Franchisee's duties, obligations and responsibilities hereunder and to operate the Kidokinetics Business in a businesslike, proper and efficient manner; and - 16.5. Upon 30 Days' Notice to Cure. Franchisee shall be deemed to be in default and Franchisor has the right to terminate this Agreement if Franchisee fails to perform or comply with any one or more of the terms or conditions of this Agreement or any ancillary agreements between Franchisee and Franchisor or Franchisor's affiliates and fails to cure such default after notice and expiration of the thirty (30)-day cure period. - 16.6. Franchisor's Cure of Franchisee's Defaults. In the event of a default by Franchisee, in addition to Franchisor's right to terminate the Franchise Agreement, Franchisor may, but has no obligation to: - 16.6.1. effect a cure on Franchisee's behalf and at Franchisee's expense, and Franchisee shall immediately pay Franchisor the costs incurred by Franchisor upon demand; or - 16.6.2. enter upon the Kidokinetics Business Location and exercise complete authority with respect to the operation of the Kidokinetics Business until such time as Franchisor determines that the default of Franchisee has been cured and that Franchisee is complying with the requirements of this Agreement. Franchisee specifically agrees that a designated representative of Franchisor may take over, control and operate the Kidokinetics Business. In addition to all other fees paid under this Agreement, Franchisee shall pay Franchisor ten (10%) percent of the Gross Sales generated by the Kidokinetics Business during Franchisor's operation of the Kidokinetics Business, as compensation. Source: Item 22 — CONTRACTS (FDD page 59)

Question 62

What happens if a Kidokinetics franchisee fails to meet one of the renewal conditions?

Accepted Answer

RELATIONSHIP

|    | Provision                                      | Franchise or Other | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----|------------------------------------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                | Agreement          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| a. | Length of the franchise term                   | Article 3          | The initial term is 10 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| b. | Renewal or extension of the term               | Article 4          | You may renew for one additional term of 10 years, subject to our renewal requirements. If you fail to meet any one of these conditions, we may refuse to renew or extend the terms of your Franchise Agreement.                                                                                                                                                                                                                                                                                                                                                                                              |
| c. | Requirements for franchisee to renew or extend | Article 4          | Be in full compliance, provide written notice to us at least 90 days, but not more than nine months, before the end of the term, update machinery, equipment, tools and vehicles as required, not be in default of any provision of the Franchise Agreement, satisfy all monetary obligations, execute our then-current form of franchise agreement (with materially different terms and conditions than your original Franchise Agreement), comply with then-current qualifications and training requirements, including completion of additional training, pay us a Renewal Fee, execute a general release. |
| d. | Termination by franchisee                      | None               | Not applicable. You may not terminate the Franchise Agreement. (Subject to applicable state law).

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)

Question 63

What happens if a Kidokinetics franchisee fails to meet any of the renewal conditions?

Accepted Answer

|    | Provision                                      | Franchise or Other | Summary                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|----|------------------------------------------------|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                | Agreement          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| a. | Length of the franchise term                   | Article 3          | The initial term is 10 years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| b. | Renewal or extension of the term               | Article 4          | You may renew for one additional term of 10 years, subject to our renewal requirements. If you fail to meet any one of these conditions, we may refuse to renew or extend the terms of your Franchise Agreement.                                                                                                                                                                                                                                                                                                                                                                                              |
| c. | Requirements for franchisee to renew or extend | Article 4          | Be in full compliance, provide written notice to us at least 90 days, but not more than nine months, before the end of the term, update machinery, equipment, tools and vehicles as required, not be in default of any provision of the Franchise Agreement, satisfy all monetary obligations, execute our then-current form of franchise agreement (with materially different terms and conditions than your original Franchise Agreement), comply with then-current qualifications and training requirements, including completion of additional training, pay us a Renewal Fee, execute a general release.

Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 40–46)

Question 64

What happens if a Kidokinetics franchisee does not follow the rules when using the Marks?

Accepted Answer

You must follow our rules when using the Marks. You cannot use our name or Mark as part of a corporate name or with modifying words, designs or symbols unless you receive our prior written consent. You must indicate to the public in any contract, advertisement and with a conspicuous sign in your Kidokinetics Business that you are an independently owned and operated licensed franchisee of Kidokinetics. You may not use the Marks in the sale of unauthorized products or services or in any manner we do not authorize. You may not use the Marks in any advertising for the transfer, sale or other disposition of the Kidokinetics Franchise, or any interest in the Kidokinetics Franchise. All rights and goodwill from the use of the Marks accrue to us.

Source: Item 13 — TRADEMARKS (FDD pages 36–38)

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