What is the formula for calculating the Local Marketing Requirement for a Kidokinetics franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
quirement
After you open your Kidokinetics Business, you are required to spend the greater of $500 or 2% of Gross Sales per month on a rolling 12-month average on local advertising and marketing to promote your Kidokinetics Business ("Local Marketing Requirement"). The Local Marketing Requirement applies once for a single franchisee operating up to four Kidokinetics Businesses so long as they are operated by the same legal entity and have adjacent territories.
You must order sales and marketing material from us or our designated suppliers. It is a material breach of the Franchise Agreement to use other marketing material without obtaining our prior written approval. If you desire to use your own advertising materials, including your own website, you must obtain our prior approval, which may be granted or denied in our sole discretion. We will review your request and we will respond in writing within 30 days from the date we receive all requested information. Our failure to notify you in the specified time frame will be deemed a disapproval of your request. Use of logos, Marks and other name identification materials must follow our approved standards. You may not use our logos, Marks and other name identification materials on items to be sold or services to be provided without our prior written approval.
Brand Development Fund
The brand development fund ("Brand Development Fund") is for marketing, developing, and promoting the System, the Marks and Kidokinetics Franchises. You must pay 2% of your weekly Gross Sales to the Brand Development Fund ("Brand Development Fund Contribution").
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–34)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees must spend on local advertising and marketing to promote their Kidokinetics business. The Local Marketing Requirement is the greater of $500 or 2% of Gross Sales per month on a rolling 12-month average. This is designed to ensure consistent local promotion of the franchise.
This requirement applies once for a single franchisee operating up to four Kidokinetics Businesses, provided they are operated by the same legal entity and have adjacent territories. This means that a franchisee with multiple locations meeting these conditions isn't required to multiply their marketing spend for each location, offering some economy of scale.
Kidokinetics requires that franchisees order sales and marketing material from Kidokinetics or its designated suppliers. Franchisees must obtain prior written approval from Kidokinetics to use their own advertising materials. These stipulations allow Kidokinetics to maintain brand consistency and control over marketing messages. Franchisees can obtain paid advertising on the Internet (i.e., Google, Yahoo, Bing, and MSN) for their Kidokinetics Business, and these fees may be credited to the Local Marketing Requirement.