Can the Kidokinetics Brand Development Fund be used for quality control programs?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
We have complete discretion on how the Brand Development Fund will be utilized. We may use the Brand Development Fund for local, regional, or national marketing, or any expenditure that we, in our sole discretion, deem necessary or appropriate to promote or improve the System or the Kidokinetics brand. For example, we may use the Brand Development Fund for: (i) developing, maintaining, administering, directing, preparing or reviewing advertising and marketing materials, promotions and programs, including social media management; (ii) public awareness of any of the Marks; (iii) public and consumer relations and publicity; (iv) brand development; (v) research and development of technology, products and services; (vi) website development (including social media) and search engine optimization; (vii) development and implementation of quality control programs; (viii) conducting market research; (ix) changes and improvements to the System; (x) the fees and expenses of any advertising agency we engage to assist in producing or conducting advertising or marketing efforts; (xi) collecting and accounting for Brand Development Fund Contributions; (xii) preparing and distributing financial accountings of the Brand Development Fund; (xiii) conducting quality assurance programs and other reputation management functions; and (xiv) our and our affiliates' expenses associated with direct or indirect labor, administrative, overhead, or other expenses incurred in relation to any of these activities. We may use national and/or regional advertising agencies as the source for our advertising materials, or we may prepare them in-house.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–34)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the Brand Development Fund can be used for quality control programs. Kidokinetics has complete discretion on how the Brand Development Fund is utilized. The fund may be used for local, regional, or national marketing, or any expenditure that Kidokinetics deems necessary or appropriate to promote or improve the Kidokinetics system or brand.
Specifically, the FDD states that the Brand Development Fund can be used for the development and implementation of quality control programs. It can also be used for conducting quality assurance programs and other reputation management functions. This means that a portion of the 2% of weekly gross sales that franchisees contribute to the Brand Development Fund could be allocated to initiatives aimed at maintaining and improving the quality of Kidokinetics services and brand reputation.
Kidokinetics does not guarantee that advertising expenditures from the Brand Development Fund will benefit any franchisee directly or on a pro rata basis. While franchisees contribute to the fund, Kidokinetics retains control over how the funds are spent, and there is no obligation to allocate funds to specific geographic areas or to ensure direct benefits to individual franchisees. Franchisees should consider that the benefits from the Brand Development Fund may be indirect and system-wide rather than directly attributable to their specific Kidokinetics business.