What is the definition of 'Reporting Affiliate Locations' for the Kidokinetics financial performance representation?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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"Reporting Affiliate Locations"). Two territories opened by another affiliate opened in 2023 and have been excluded because they did not operate for all twelve months of 2023. The tables below provide information on two Affiliates Locations and sixteen reporting Franchised Locations ("Reporting Group") for calendar year 2023. For the three Franchise Locations in the Reporting Group that have operated for at least 24 months as of December 31, 2023 ("Mature Franchised Locations"), we also include data regarding the costs of goods sold and operating expenses incurred by these Mature Franchise Locations. We exclude the data of the 89 franchised territories that did not operate for all twelve months of 2023. The Affiliate Locations do not pay Royalty Fees, Brand Development Fund Contributions, or technology fees and are not subject to a Local Marketing Requirement, all of which a franchised Kidokinetics Businesses will have to pay. The Kidokinetics Businesses included in this financial performance representation offer similar services and faces a similar degree of competition anticipated for the Kidokinetics Businesses offered under this Franchise Disclo
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the financial performance representation includes data from 'Reporting Affiliate Locations.' The document specifies that two territories opened by another affiliate in 2023 were excluded from the reporting because they did not operate for the entire twelve months of 2023. The financial data provided includes information from two 'Affiliate Locations' and sixteen reporting franchised locations, which together form the 'Reporting Group' for the 2023 calendar year.
It is important to note that the 'Affiliate Locations' do not pay Royalty Fees, Brand Development Fund Contributions, or technology fees, nor are they subject to a Local Marketing Requirement, all of which are obligations for franchised Kidokinetics businesses. The financial performance representation is based on locations that offer similar services and face a similar degree of competition as anticipated for new Kidokinetics franchises.
Table 1 in the FDD includes average Gross Sales for both the franchised locations within the 'Reporting Group' and the 'Reporting Affiliate Locations.' This table breaks down the Gross Sales based on the number of territories operated by each franchised location, including those operating one, two, or three Kidokinetics businesses during the 2023 calendar year. This distinction is important because franchisees can operate in up to four territories, and the financial information may be combined, potentially leading to higher Gross Sales and Net Operating Income for multi-territory operators compared to single-territory operators.