Which franchisees are subject to the initial fee deferral policy for Kidokinetics?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
to state: Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance.
Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all initial payments by franchisees that purchase multiple franchises shall be deferred until the first franchise opens.
FRANCHISOR: KIDOKINETICS FRANCHISE LLC Entity name (if any) _ Date:
MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
- (a) A prohibition on your right to join an association of franchisees.
- (b) A requirement that you assent to a release, assignment, novation, waiver, or estoppel which deprives you of rights and protections provided in this act. This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- (c) A provision that permits us to terminate a Franchise prior to the expiration of its term except for good cause.
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the initial fee deferral policy applies to specific franchisees in certain states. In general, franchisees subject to this policy will have their initial fees and payments deferred until Kidokinetics completes its pre-opening obligations under the franchise agreement. Additionally, franchisees who purchase multiple Kidokinetics franchises will have their initial payments deferred until the first franchise location opens.
Specifically, in Virginia, the Virginia State Corporation Commission's Division of Securities and Retail Franchising mandates the deferral of the initial franchise fee and other initial payments until Kidokinetics fulfills its pre-opening obligations. Similarly, in Illinois, the Attorney General's Office requires deferral of all initial fees, including the Franchise Fee, until Kidokinetics completes its initial obligations and the franchise is open for business. In New York, Items 5 and 7 of the FDD and Section 5.1 of the Franchise Agreement are amended to state: Payment of the Initial Franchise Fee shall be deferred until Kidokinetics has satisfied its pre-opening obligations to Franchisee and Franchisee has commenced doing business.
In Minnesota, Items 5 and 7 of the FDD and Section 5.1 of the Franchise Agreement are amended to state: Payment of the Initial Franchise Fee shall be deferred until Kidokinetics has satisfied its pre-opening obligations to Franchisee and Franchisee has commenced doing business. This deferral policy is a notable benefit for franchisees as it reduces the upfront financial burden, aligning payments with the progress of the franchise setup and commencement of operations. However, it's important for prospective franchisees to understand the specific conditions and obligations tied to this deferral, as well as any potential implications for their individual circumstances and location.