How are fixed dollar amount fees in the Kidokinetics Franchise Agreement adjusted?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.9. Consumer Price Index. All fees expressed as a fixed dollar amount in this Franchise Agreement are subject to adjustment based on changes to the Consumer Price Index in the United States. Franchisor may periodically review and increase these fees based on changes to the Consumer Price Index, but only if the increase to the Consumer Price Index is more than 5% higher than the corresponding Consumer Price Index in effect on: (a) the effective date of the Franchise Agreement (for the initial fee adjustments); or (b) the date Franchisor implemented the last fee adjustment (for subsequent fee adjustments). Franchisor will notify Franchisee of any CPI adjustment at least 60 days before the fee adjustment becomes effective. Franchisor will implement no more than one fee adjustment during any calendar year. Notwithstanding the foregoing, the fee adjustments in this Section shall not impact fees which we reserve the right to increase in higher amounts or to adjust more frequently, including but not limited to the Technology Fee.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, fixed dollar amount fees within the Franchise Agreement are subject to adjustments based on changes in the Consumer Price Index (CPI) in the United States. Kidokinetics may periodically review and increase these fees. However, such increases are only implemented if the CPI increase is more than 5% higher than the CPI in effect either on the effective date of the Franchise Agreement for initial adjustments, or on the date of the last fee adjustment for subsequent adjustments.
Kidokinetics is required to notify franchisees at least 60 days before any CPI-based fee adjustment takes effect. Furthermore, Kidokinetics will only implement one fee adjustment during any calendar year. This provides franchisees with some predictability and time to prepare for any changes in fees.
It's important to note that these CPI-based adjustments do not apply to all fees. Kidokinetics retains the right to increase certain fees, such as the Technology Fee, by higher amounts or more frequently than dictated by the CPI adjustment mechanism. Therefore, franchisees should be aware that while some fees are tied to the CPI, others are subject to discretionary adjustments by Kidokinetics.