When is the Kidokinetics Brand Development Fund contribution due?
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, the Brand Development Fund contribution, which is 2% of Gross Sales, is due weekly. This contribution is paid at the same time as the Royalty fee. Kidokinetics may use this fund for any purpose they determine.
In practical terms, this means that each week, a Kidokinetics franchisee must calculate 2% of their gross sales and remit that amount to the Brand Development Fund. This is in addition to the royalty fee, which is the greater of 8% of gross sales or a minimum royalty amount. The FDD specifies that fees are generally paid via electronic funds transfer (EFT) or similar means.
It's important to note that the Brand Development Fund contribution is based on gross sales, not net profit, so franchisees need to factor this expense into their financial planning. Also, the FDD indicates that Kidokinetics has discretion over how the Brand Development Fund is used, which is a common practice in franchising, but prospective franchisees should inquire about the franchisor's typical allocation of these funds.