What financial documents are the Kidokinetics franchisee and each Principal required to provide to the franchisor?

According to Kidokinetics's 2024 Franchise Disclosure Document, both the franchisee and each principal, if requested by Kidokinetics, must provide the franchisor with their most recent financial statements and tax returns. These documents must accurately reflect the financial position of both the franchisee and each principal at the dates indicated. For the franchisee, the documents should also include the results of its operations and cash flow for the years ended.

Kidokinetics also requires franchisees to maintain complete and accurate books and records of their transactions and business operations, adhering to accounting procedures specified by Kidokinetics. Franchisees must purchase computer systems that meet Kidokinetics's requirements and maintain their records and accounts to Kidokinetics's standards. Kidokinetics reserves the right to require franchisees to hire an outside accounting or bookkeeping firm if they find that the franchisee is not maintaining records and accounts to their standards; franchisees are required to use the bookkeeping service that Kidokinetics chooses.

Furthermore, franchisees must maintain complete financial records for at least five fiscal years, following IRS guidelines. They must provide Kidokinetics with several reports, including: weekly sales reports, quarterly income statements and profit and loss statements within 20 days after each quarter's end, annual financial reports and operating statements within 50 days after the close of each fiscal year, state and local sales tax returns or reports, and federal, state, and local income tax returns within 30 days after completion. Franchisees must also provide any other reports that Kidokinetics may require from time to time.

Kidokinetics also requires franchisees to provide, upon request, user names and passwords for services used in the operation of the Kidokinetics business, including social media accounts and QuickBooks, but specifically excluding passwords to online banking or other financial accounts. Additionally, franchisees must notify Kidokinetics in writing within five days of any action, suit, or proceeding that may adversely affect the operation or financial condition of the franchisee or the Kidokinetics business.