Why were some affiliate territories excluded from the Kidokinetics financial performance representation?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
"Reporting Affiliate Locations"). Two territories opened by another affiliate opened in 2023 and have been excluded because they did not operate for all twelve months of 2023. The tables below provide information on two Affiliates Locations and sixteen reporting Franchised Locations ("Reporting Group") for calendar year 2023. For the three Franchise Locations in the Reporting Group that have operated for at least 24 months as of December 31, 2023 ("Mature Franchised Locations"), we also include data regarding the costs of goods sold and operating expenses incurred by these Mature Franchise Locations. We exclude the data of the 89 franchised territories that did not operate for all twelve months of 2023. 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. The Kidokinetics Businesses included in this financial performance representation offer similar services and faces a similar degree of competition anticipated for the Kidokinetics Businesses offered under this Franchise Disclosure Document.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, some affiliate territories were excluded from the financial performance representation because they did not operate for the entirety of 2023. Specifically, two territories opened by an affiliate in 2023 were excluded because they were not in operation for all twelve months of that year. The financial performance representation includes data from two Affiliate Locations and sixteen reporting Franchised Locations for the 2023 calendar year.
Kidokinetics includes financial data from locations that have been operating for a significant period to provide a more accurate representation of potential performance. By excluding locations that haven't been open for a full year, Kidokinetics aims to present a financial picture based on a consistent operational history. This approach helps prospective franchisees understand the potential financial outcomes after a reasonable period of establishment.
It is important to note that the Affiliate Locations do not pay Royalty Fees, Brand Development Fund Contributions, or technology fees, nor are they subject to a Local Marketing Requirement, all of which a franchised Kidokinetics business will have to pay. Therefore, while the financial data from Affiliate Locations is included, prospective franchisees should consider these additional costs when evaluating the potential profitability of a franchised Kidokinetics business.