Is a Kidokinetics franchisee required to participate in all advertising and sales promotion programs developed by the franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
12. ADVERTISING, PROMOTIONS AND RELATED FEES
12.1. Advertising Programs. Franchisor may, from time to time, develop and administer advertising and sales promotion programs designed to promote and enhance the collective success of all Kidokinetics franchises operating under the System. Franchisee shall participate in all such advertising and sales promotion programs in accordance with the terms and conditions established by Franchisor from time to time for each program. In all aspects of these programs, including, without limitation, the type, quantity, timing, placement and choice of media, market areas and advertising agencies, the standards and specifications established by Franchisor, as modified from time to time, will be final and binding upon Franchisee.
12.2. Local Marketing.
12.2.1. In addition to the ongoing advertising contributions set forth herein, Franchisee shall spend annually, throughout the term of this Agreement, the greater of $500 or 2% of Gross Sales per
month on a rolling 12-month average ("Local Marketing Requirement") on advertising for the Kidokinetics Business within the Territory ("Local Marketing"). Franchisee is not required to spend more than the Local Marketing Requirement, but there is no limit on the amount Franchisee may spend on local advertising. Franchisor does not impose an additional Local Marketing Requirement for a single franchisee operating up to four outlets if they are operated by the same legal entity and have adjacent territories. On or before the 1st day of February each year, Franchisee must submit to Franchisor a Local Marketing expenditure report accurately reflecting such expenditures for the preceding annual period. If that day is not a business day, then such report will be due on the next business day. 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;
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to participate in advertising and sales promotion programs developed by the franchisor. The franchisee must adhere to the terms and conditions set by Kidokinetics for each program. These terms include the type, quantity, timing, placement, and choice of media, market areas, and advertising agencies. Kidokinetics's standards and specifications are final and binding on the franchisee.
Kidokinetics also has the right to establish regional advertising and promotional cooperatives. If a cooperative is established that applies to a franchisee's Kidokinetics business, the franchisee must participate in it. Contributions to the cooperative will be credited toward the Local Marketing Requirement, which is the greater of $500 or 2% of gross sales per month on a rolling 12-month average. Cooperative contributions will not exceed the Local Marketing Requirement unless a majority of the cooperative votes to increase that requirement.
Kidokinetics may also initiate promotional programs for the benefit of all franchisees, such as "frequent purchase" card programs or special service discounts. Franchisees agree to accept and honor all rebates, giveaways, cards, promotional coupons, or other System-wide offers, as accepted by other franchisees in the System. These programs may include minimum and maximum price policies, minimum advertised price policies and unilateral price policies.