Who bears the cost of paid internet advertising for a Kidokinetics business?

According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are responsible for the costs associated with paid internet advertising for their Kidokinetics businesses. Specifically, franchisees must have paid advertising on the Internet, including platforms like Google, Yahoo, Bing, and MSN, and they must bear the expense. These advertising fees can be credited toward the franchisee's Local Marketing Requirement.

This Local Marketing Requirement mandates that franchisees spend the greater of $500 or 2% of Gross Sales per month (calculated on a rolling 12-month average) on advertising within their territory. While franchisees are not obligated to exceed this requirement, there is no limit to how much they can spend on local advertising. Franchisees must submit an annual Local Marketing expenditure report to Kidokinetics by February 1st each year.

It's important to note that certain costs and expenditures are excluded from the Local Marketing Requirement unless pre-approved by Kidokinetics in writing. These include incentive programs for employees, research expenditures, salaries and expenses for personnel attending advertising meetings, and charitable or political donations. Kidokinetics may also require franchisees to subscribe to designated email marketing programs, such as Constant Contact, at the franchisee's sole cost.

Kidokinetics retains significant control over internet marketing and the use of its trademarks online. While franchisees are responsible for the cost of their internet advertising, all advertising and promotional materials must adhere to Kidokinetics's standards and require franchisor approval. Kidokinetics also reserves the right to access and manage franchisees' social media accounts to ensure brand consistency and effective marketing strategies.