On what basis must a Kidokinetics franchisee's fiscal year be?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee must maintain, for at least five fiscal years from their preparation, complete financial records for the operation of the Kidokinetics Business in accordance with the then current Internal Revenue Service Publication and must provide Franchisor, at Franchisor's request, with: (i) a weekly Sales Report signed by Franchisee and in the form Franchisor specifies that contains the sales information pertaining to the preceding week including, without limitation, a summary of all monies received during the relevant period, any other additional information which Franchisor deems necessary to properly evaluate Franchisee's progress; (ii) a quarterly income statement and profit and loss statement, reflective of the three individual months in the quarter, in a format specified by Franchisor, including a standard chart of accounts, within 20 days after the end of each quarter; (iii) annual financial reports and operating statements in the form Franchisor specifies within 50 days after the close of each of Franchisee's fiscal years; (iv) state and local sales tax returns or reports and federal, state and local income tax returns for each year in which Franchisee's Kidokinetics Business is operated, within 30 days after their timely completion; and (v) such other reports as Franchisor may from time to time require, in the form and at the time Franchisor prescribes.
Franchisee's fiscal year must be on a calendar year basis.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, a franchisee's fiscal year must be based on a calendar year. This means that the Kidokinetics franchisee's financial year will begin on January 1 and end on December 31 of each year.
This requirement ensures uniformity and consistency in financial reporting across all Kidokinetics franchises. It simplifies the process of comparing financial performance between different franchise locations and allows Kidokinetics to accurately assess the overall financial health of the franchise system.
Furthermore, Kidokinetics requires franchisees to provide annual financial reports and operating statements within 50 days after the close of each fiscal year. Franchisees must also submit state and local sales tax returns, as well as federal, state, and local income tax returns, within 30 days after their timely completion. Adhering to a calendar year basis helps franchisees align their reporting obligations with standard tax and accounting practices.