Must a Kidokinetics franchisee reimburse Kidokinetics for expenses incurred in determining whether to approve an item, service, or supplier?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
If you want to use any item or service in establishing or operating your Kidokinetics Business that we have not approved (for items or services that require supplier approval), you must first send us sufficient information, specifications or samples for us to determine whether the item or service complies with our standards and specifications or whether the supplier meets our approved supplier criteria. You must reimburse us for all of our reasonable expenses in connection with determining whether we will approve an item, service or supplier. We will decide within a reasonable time (usually 30 days) after receiving the required information whether you may purchase or lease the items or services or if you may purchase from the supplier. Our approval may later be withdrawn based on the supplier's performance, changes in our specifications, standards or requirements, or for other reasons.
Our approval process generally focuses on the supplier's dependability, general reputation and ability to provide sufficient quantity of product or services, and the products' or services' prices and quality. Our standards, specifications and other criteria for supplier or distributor approval have been developed by us, our principals and our affiliates through the expenditure of extensive work and time and are considered confidential information. We do not make our standards and specifications or our other criteria for supplier
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–24)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, if a franchisee wants to use an item or service in their Kidokinetics business that has not been approved, they must first provide Kidokinetics with sufficient information, specifications, or samples. This allows Kidokinetics to determine if the item or service meets their standards.
Importantly, the franchisee is responsible for reimbursing Kidokinetics for all reasonable expenses related to determining whether to approve the item, service, or supplier. Kidokinetics will then decide within a reasonable time, typically 30 days after receiving the required information, whether the franchisee can purchase or lease the items or services, or purchase from the supplier.
Kidokinetics's approval may be withdrawn later based on the supplier's performance, changes in specifications, standards, requirements, or for other reasons. The approval process generally focuses on the supplier's dependability, reputation, ability to provide sufficient quantities, and the prices and quality of their products or services. Kidokinetics does not make their standards, specifications, or other criteria for supplier or distributor approval available to franchisees or approved suppliers, as this information is considered confidential.