Is a Kidokinetics franchisee required to use a specific bookkeeping service?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
11.2. Bookkeeping and Reports.
- 11.2.1.
Franchisee agrees to keep and maintain complete and accurate books and records of its transactions and business operations utilizing the accounting procedures specified by Franchisor.
Franchisee agrees to: (i) purchase the computer systems in accordance with the requirements of this Agreement; and (ii) maintain the records and accounts of the Franchisee to the standards of the Franchisor.
Franchisor reserves the right to require Franchisee hire an outside accounting or bookkeeping firm to maintain the records and accounts of the Franchisee should it find, in its sole discretion, that Franchisee is not maintaining the records and accounts in accordance with the standards of the Franchisor.
Franchisee is required to use the bookkeeping service that Franchisor chooses.
- 11.2.2.
Franchisee must maintain, for at least five fiscal years from their preparation, complete financial records for the operation of the Kidokinetics Business in accordance with the then current Internal Revenue Service Publication and must provide Franchisor, at Franchisor's request, with: (i) a weekly Sales Report signed by Franchisee and in the form Franchisor specifies that contains the sales information pertaining to the preceding week including, without limitation, a summary of all monies received during the relevant period, any other additional information which Franchisor deems necessary to properly evaluate Franchisee's progress; (ii) a quarterly income statement and profit and loss statement, reflective of the three individual months in the quarter, in a format specified by Franchisor, including a standard chart of accounts, within 20 days after the end of each quarter; (iii) annual financial reports and operating statements in the form Franchisor specifies within 50 days after the close of each of Franchisee's fiscal years; (iv) state and local sales tax returns or reports and federal, state and local income tax returns for each year in which Franchisee's Kidokinetics Business is operated, within 30 days after their timely completion; and (v) such other reports as Franchisor may from time to time require, in the form and at the time Franchisor prescribes.
Franchisee's fiscal year must be on a calendar year basis.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to use accounting procedures specified by Kidokinetics. Franchisees must maintain accurate books and records of their transactions and business operations. Kidokinetics reserves the right to mandate that franchisees hire an outside accounting or bookkeeping firm if they are not maintaining records and accounts to Kidokinetics's standards. The FDD states that franchisees are required to use the bookkeeping service that Kidokinetics chooses.
Kidokinetics franchisees must purchase computer systems that meet the agreement requirements and maintain records and accounts to Kidokinetics's standards. Franchisees must also provide user names and passwords for services used in the operation of the Kidokinetics business, including QuickBooks, upon request by Kidokinetics. However, this does not include passwords to online banking or other financial accounts.
Furthermore, franchisees must maintain complete financial records for at least five fiscal years and provide Kidokinetics with weekly sales reports, quarterly income statements and profit and loss statements, annual financial reports and operating statements, and state and local sales tax returns or reports, as well as federal, state, and local income tax returns. The franchisee's fiscal year must be on a calendar year basis.