What is the alternative calculation for the Local Advertising fee for a Kidokinetics franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ER FEES
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | The greater of 8% of Gross Sales (2) or the "Minimum Royalty" (3) | Due on Wednesday of\neach week for percentage-based Royalty; Monthly for the Minimum Royalty | The "Royalty" is based on "Gross Sales" during the previous week. Your Royalty is an ongoing payment that allows you to use the Marks and the intellectual property of the System and pays for our ongoing support and assistance. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to pay a local advertising fee. This fee is calculated as the greater of $500 per month or 2% of Gross Sales per month, figured on a rolling 12-month average.
This means that each month, a Kidokinetics franchisee must determine 2% of their average monthly Gross Sales over the previous 12 months. If that amount exceeds $500, the franchisee must spend that higher amount on local advertising. If 2% of their average monthly Gross Sales is less than $500, they are still obligated to spend $500 on local advertising.
This structure ensures that franchisees contribute a minimum amount to local advertising efforts, while also scaling the contribution with the success of their Kidokinetics business. Franchisees should carefully track their Gross Sales and advertising expenditures to ensure compliance with this requirement.