Does Kidokinetics currently have any purchasing or distribution cooperatives?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
uppliers.
We may, but are not required to, negotiate purchase arrangements with suppliers and distributors for the benefit of franchisees and the System as a whole, and we may receive rebates or volume discounts from our purchase of equipment and supplies that we resell to you. We currently do not have any purchasing or distribution cooperatives. We do not provide any other material benefits to franchisees for using designated or approved suppliers; however, purchases of unapproved products or from unapproved suppliers in violation of the Franchise Agreement will entitle us to, among other things, terminate the Franchise Agreement. We and our affiliates may receive rebates from some suppliers based on your purchase of products and services and we have no obligation to pass them on to our franchisees or use them in any particular manner. We reserve the right to receive fees or other consideration in exchange for rights licensed or granted, or services rendered to third parties, including vendors. We may derive income, consideration and other benefits from your purchases or lease of any products, services, supplies or other items from us and from approved and designated suppliers. This income may be derived in any form, including as a rebate from various suppliers based on the quantity of System franchisee purchases. We do not guarantee the availability of independent sources of supply for any particular product or service required to establish or operate your Kidokinetics Business.
You will also pay us a Software License Fee of $3,000 prior to opening for our proprietary KIDOLINK software ($1,000 for additional Kidokinetics Businesses). Except as disclosed above, as of the Issuance Date of this Franchise Disclosure Document, neither we, nor our affiliates are approved suppliers of any item, although we may become one in the future. Some of our officers own an equity interest in us, an approved
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–24)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics does not currently have any purchasing or distribution cooperatives. However, Kidokinetics retains the right to negotiate purchase arrangements with suppliers and distributors for the benefit of franchisees and the system as a whole. They may also receive rebates or volume discounts from their purchases of equipment and supplies that they resell to franchisees.
Kidokinetics estimates that a significant portion of a franchisee's expenditures, both in establishing the business (30% to 80%) and on an ongoing basis (25% to 30%), will be from Kidokinetics, approved suppliers, or under their specifications. During the fiscal year ended December 31, 2023, Kidokinetics derived $511,370 in revenue from required franchisee purchases, specifically from sales of shirts and other apparel. This revenue represented 14.5% of Kidokinetics's total revenue of $3,509,206 for that year.
Kidokinetics requires franchisees to operate their businesses according to the Kidokinetics system and specifications, including purchasing or leasing products, services, supplies, equipment, computer hardware and software, and inventory from designated sources. Franchisees must adhere to these standards and specifications, and deviations require prior written consent. The confidential franchise operations manual outlines these standards, specifications, and guidelines, and Kidokinetics will notify franchisees of any changes through amendments or supplements to the manual or other written communication.
If a franchisee wishes to use an item or service not already approved by Kidokinetics, they must submit sufficient information for Kidokinetics to determine whether it complies with their standards and specifications. The franchisee is responsible for reimbursing Kidokinetics for all reasonable expenses associated with this approval process. Kidokinetics's approval process focuses on the supplier's dependability, reputation, ability to provide sufficient quantities, and the prices and quality of the products or services. Kidokinetics reserves the right to limit the number of potential suppliers and may designate exclusive suppliers for certain categories of products or services.