How is the Kidokinetics Brand Development Fund contribution calculated?
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. See Note 3 for a breakout of the Minimum Royalty by timeframe of operation. |
| Brand Development | 2% of Gross Sales | Weekly | You must pay us a brand development fund contribution of 2% of Gross Sales at the same time as the Royalty. We may use the brand development fund for any purpose we determine. |
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 contribute to the Brand Development Fund. This contribution is calculated as 2% of Gross Sales, and it is due weekly, at the same time as the Royalty fee.
The FDD states that Kidokinetics may use the brand development fund for any purpose they determine. This means that franchisees do not have direct control over how the fund is spent, and Kidokinetics has broad discretion in allocating these resources.
It is important for prospective franchisees to understand that this Brand Development Fund contribution is in addition to other fees, such as the Royalty Fee (8% of Gross Sales or a minimum royalty) and local advertising expenses (the greater of $500 per month, or 2% of Gross Sales per month on a rolling 12-month average). These ongoing costs should be carefully considered when evaluating the financial feasibility of a Kidokinetics franchise.