What expenses are not reflected in the financial performance representations in Table 2 for Kidokinetics, that must be deducted to obtain net income or profit?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
-
- "Adjusted Net Operating Income" equals Gross Sales less Disclosed Operating Expenses and Franchise Related Adjustments. Adjusted Net Operating Income is not net profit and does not include all operating expenses or any non-operating expenses such as taxes, interest, depreciation and amortization
-
- The financial performance representations in Table 2 do not reflect all expenses such as taxes and amortization that must be deducted from the Gross Sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your franchised business.
-
- "Disclosed Operating Expenses" refers to the expenses disclosed in Table 2A, Table 2B, and Table 2C and does not include all operating expenses or costs of goods and/or services provided.
The Disclosed Operating Expenses do not include the payroll wages of the owners and managers of these Franchise Locations and certain other expenses.
The payroll taxes paid in connection with the payroll of these owners and managers was not excluded.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the financial performance representations in Table 2 do not reflect all expenses that must be deducted from gross sales to obtain net income or profit. Specifically, these expenses include taxes and amortization.
Furthermore, the "Disclosed Operating Expenses" listed in Tables 2A, 2B, and 2C do not include all operating expenses or costs of goods and/or services provided. Notably, the payroll wages of the owners and managers of these franchise locations are excluded from these disclosed operating expenses. However, the payroll taxes paid in connection with the payroll of these owners and managers was not excluded.
Prospective franchisees should be aware that the "Adjusted Net Operating Income" is not net profit and does not include all operating expenses or any non-operating expenses such as taxes, interest, depreciation, and amortization. Kidokinetics recommends that prospective franchisees conduct an independent investigation of all costs and expenses they will incur while operating their franchised business to fully understand potential profitability.