Is a Kidokinetics franchisee required to pay the Brand Development Fund Contribution?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.5.3. Brand Development Fund Contribution. Franchisee shall pay to Brand Development Fund (as defined in Section 12.8) without offset, credit, or deduction of any nature, two percent (2%) of Gross Sales ("Brand Development Fund Contribution"). Brand Development Fund Contributions shall be paid at the same time and in the same manner as Royalty as provided in Section 5.2.1.
- 5.5.4. Annual Conference Fee. Franchisee shall pay to Franchisor the then-current annual conference fee. Payment is due upon receipt of written notice that such conference is being held. Franchisee shall pay the Annual Conference Fee regardless of whether Franchisee registers for or attends the annual conference. The annual conference fee may be increased system wide, in our discretion, should costs to conduct the annual conference increase. Franchisee is responsible for its representatives' travel costs and accommodations.
- 5.5.5. Sales Support Fee. If requested by Franchisee, Franchisor will provide sales support for the Kidokinetics Business and contact various potential customers in an effort to drive sales for the Kidokinetics Business. Franchisee shall pay Franchisor a fee for all potentials customer that Franchisor contacts using its sales support services becomes a customer of the Kidokinetics Business equal to 5% of the Gross Sales generated for a period of 90 days ("Sales Support Fee". Franchisee may terminate these services upon written notice to Franchisor; however, Franchisee will continue to pay the Sales Support Fee for any customers generated during the period when Franchisor provided the sales support to Franchisee.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to pay a Brand Development Fund Contribution. Specifically, Kidokinetics franchisees must contribute two percent (2%) of their Gross Sales to the Brand Development Fund. These contributions must be made without any offset, credit, or deduction.
The Brand Development Fund is used to promote public awareness of the Kidokinetics brand and improve the Kidokinetics system. Kidokinetics has the sole discretion to determine how the fund is used, including developing marketing materials, conducting market research, and improving the Kidokinetics system. The Brand Development Fund is not a trust, and Kidokinetics has no fiduciary obligations regarding its administration.
Kidokinetics franchisees must pay the Brand Development Fund Contribution at the same time and in the same manner as royalty payments. If the Brand Development Fund Contribution is not received as required, Kidokinetics may charge a late fee of $25.00 per week. Additionally, any unpaid amounts will bear interest at a rate of 1.5% per month or the highest rate permitted by law, whichever is lower. These payments are typically made via an electronic funds transfer program each Wednesday, along with the royalty payments.