Is a Kidokinetics franchisee required to pay for all technology fees and expenses required by the Franchise Agreement?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall pay all fees and expenses for technology required by this Agreement, including but not limited to, the costs of computer hardware and software, Internet access, license fees, help desk fees, licensing or user-based fees for a franchise portal or a benchmarking platform, web page design, and fees related to exposure on Franchisor's website.
Franchisee agrees to pay Franchisor the then-current technology fee in the amount Franchisor designates each month for technology-related services ("Technology Fee"). The Technology Fee includes services for up to four Kidokinetics Businesses if they are operated by the same legal entity and have adjacent territories. You will pay the then-current additional monthly fee any additional email addresses (over and above the four included with your Technology Fee). Franchisee shall pay the Technology Fee via ACH electronic transfer on the date designated by Franchisor. The Technology Fee is not refundable under any circumstances. Franchisor reserves the right to increase the rate and/or payment frequency of the Technology Fee at any time.
Franchisor may use a portion of the Brand Development Fund Contributions or the Technology Fee to pay or reimburse itself for the costs incurred in connection with the development, maintenance and update of its website.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are responsible for covering all technology-related fees and expenses as mandated by the Franchise Agreement. This encompasses a broad range of costs, including computer hardware and software, internet access, license fees, help desk fees, and any user-based fees associated with a franchise portal or benchmarking platform. Additionally, franchisees are responsible for expenses related to web page design and exposure on the Kidokinetics website.
Kidokinetics franchisees must also pay a "Technology Fee" each month for technology-related services, with the amount determined by Kidokinetics. This fee covers up to four Kidokinetics businesses if they are operated by the same legal entity and have adjacent territories. Franchisees will incur an additional monthly fee for any email addresses exceeding the four included in the Technology Fee. Kidokinetics mandates that the Technology Fee be paid via ACH electronic transfer on a designated date and retains the right to modify the rate and payment frequency of the Technology Fee at any time.
Furthermore, Kidokinetics may utilize a portion of the Brand Development Fund contributions or the Technology Fee to offset the costs associated with the development, maintenance, and updates to its website. This indicates that while franchisees contribute to these funds, Kidokinetics has the discretion to allocate them towards technology-related expenses, which may include website upkeep and enhancements. This allocation underscores the importance of technology in the Kidokinetics franchise system and the franchisee's role in supporting it financially.