When a Kidokinetics franchisee is transitioning to a new location, how are the weekly Royalty and Brand Development Fund Contributions calculated?

According to Kidokinetics' 2024 Franchise Disclosure Document, during the transition to a new location, the franchisee is still responsible for paying weekly Royalty and Brand Development Fund Contributions. The amount due is determined by the average amount paid by the franchisee during the four calendar quarters immediately preceding the date that operations cease at the original location. If the franchisee was in business for less than four quarters at the original location, the average is calculated based on the shorter period of operation. The franchisee is also responsible for the annual Technology Fee during this transition period.

This policy ensures that Kidokinetics continues to receive revenue during the transition, even though the franchisee's business may be temporarily disrupted. It also means that franchisees need to carefully plan any relocation to minimize disruption and avoid unnecessary financial burden. Franchisees should factor in these ongoing costs when evaluating the feasibility of moving their Kidokinetics business.

It's important to note that the franchisor has sole discretion over these terms during the transition period. Additionally, the franchisee is responsible for removing any signs or property that identifies the original location as part of the Kidokinetics system, at their own expense. The franchise agreement will also be updated to reflect the address of the new Kidokinetics Business Location.