Are Kidokinetics cooperative contributions credited towards the Local Marketing Requirement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
If a Cooperative is established applicable to the Kidokinetics Business, Franchisee must participate in the Cooperative. Cooperative contributions will be credited towards the Local Marketing discussed in Section 12.2 above. Cooperative contributions will not exceed the Local Marketing Requirement unless a majority of the Cooperative votes to increase that requirement. The following provisions will apply to each Cooperative:
- 12.3.1. Each Cooperative will be organized and governed in a form and manner, and will commence operation on a date, approved in advance by Franchisor;
- 12.3.2. Each Cooperative will be organized for the exclusive purpose of administering regional advertising programs and developing, subject to Franchisor's approval, standardized advertising materials for use by the members in local advertising;
- 12.3.3. No promotional or advertising plans or materials may be used by a Cooperative or furnished to its members without Franchisor's prior approval. All such plans and materials must be submitted to Franchisor for prior review and approval;
- 12.3.4. The Cooperative's activities will be agreed upon by a majority vote of the member franchisees in the Cooperative. All Cooperative contributions will be credited against the Local Marketing Requirement. The Cooperative may, by the majority vote of its members, require a Cooperative contribution in excess of the Local Marketing requirement;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, cooperative contributions are indeed credited towards the Local Marketing Requirement. If Kidokinetics establishes a regional advertising and promotional cooperative, franchisees are required to participate. Any contributions made to this cooperative will be credited towards the franchisee's Local Marketing Requirement, which is the greater of $500 or 2% of Gross Sales per month on a rolling 12-month average.
However, the cooperative contributions will not exceed the Local Marketing Requirement unless a majority of the cooperative members vote to increase that requirement. This means that while participation in the cooperative is mandatory if established, the financial burden on the franchisee is capped at their existing Local Marketing Requirement unless the franchisees themselves decide to increase it.
It's important to note that all advertising plans and materials used by the cooperative must be approved by Kidokinetics. This ensures that the regional advertising aligns with the overall brand standards and marketing strategy. Additionally, Kidokinetics may grant a franchisee an exemption from the cooperative membership requirement under certain circumstances, providing some flexibility in participation.