Can a Kidokinetics franchisee include salaries of personnel attending advertising meetings in their Local Marketing expenditures?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
The following costs and expenditures incurred by Franchisee will not be included in Franchisee's expenditures on Local Marketing for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; or (iv) charitable, political or other contributions or donations.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees cannot include salaries and expenses of their personnel for attending advertising meetings, workshops, or other marketing activities as part of their Local Marketing expenditures, unless they receive prior written approval from Kidokinetics.
Kidokinetics requires franchisees to spend the greater of $500 or 2% of Gross Sales per month on a rolling 12-month average on local advertising. Franchisees must submit a Local Marketing expenditure report to Kidokinetics by February 1st each year, accurately reflecting these expenditures for the preceding annual period.
This policy restricts franchisees from using personnel costs for local marketing compliance, potentially increasing their out-of-pocket expenses for advertising. Franchisees need to seek advance written approval from Kidokinetics to include such costs, adding an administrative step and uncertainty to their marketing budget. This is less flexible than some franchises that allow a broader range of marketing-related expenses to count toward local advertising requirements.