Does the Kidokinetics franchisor have the right to retain volume rebates or discounts received from designated manufacturers or suppliers?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 11.4. Volume Rebates.
If Franchisor receives any cash rebates, volume discounts, concessions, advertising allowances, or discount bonuses (collectively "Discounts"), whether by way of cash, kind or credit, from any manufacturer or supplier designated by Franchisor, whether or not on account of purchases made (i) by Franchisor for its own account or for Franchisee's account, or franchisees generally, or (ii) by Franchisee directly for its own account, Franchisor reserves the right to retain the whole or any partial amount of such Discounts.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics retains the right to keep any volume rebates or discounts it receives from designated manufacturers or suppliers. This applies whether Kidokinetics makes the purchases directly, or if the franchisee does.
This means that if a Kidokinetics franchisee purchases supplies from a designated supplier and that supplier offers a discount or rebate based on volume, Kidokinetics has the right to keep that discount. This could impact a franchisee's profit margin, as they may not directly benefit from volume discounts they help to generate through their purchases.
It is important for a prospective Kidokinetics franchisee to understand this policy and factor it into their financial projections. Franchisees should inquire about the typical volume of purchases required to trigger such discounts and the potential value of those discounts. Understanding this policy will allow a franchisee to accurately assess the potential costs and benefits of the Kidokinetics franchise opportunity.