How frequently can Kidokinetics implement fee adjustments based on the Consumer Price Index?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
- 5.9. Consumer Price Index. All fees expressed as a fixed dollar amount in this Franchise Agreement are subject to adjustment based on changes to the Consumer Price Index in the United States. Franchisor may periodically review and increase these fees based on changes to the Consumer Price Index, but only if the increase to the Consumer Price Index is more than 5% higher than the corresponding Consumer Price Index in effect on: (a) the effective date of the Franchise Agreement (for the initial fee adjustments); or (b) the date Franchisor implemented the last fee adjustment (for subsequent fee adjustments). Franchisor will notify Franchisee of any CPI adjustment at least 60 days before the fee adjustment becomes effective. Franchisor will implement no more than one fee adjustment during any calendar year. Notwithstanding the foregoing, the fee adjustments in this Section shall not impact fees which we reserve the right to increase in higher amounts or to adjust more frequently, including but not limited to the Technology Fee.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics can adjust fixed dollar amount fees based on changes to the Consumer Price Index (CPI). However, Kidokinetics can only make these adjustments if the CPI increase is more than 5% higher than the CPI in effect either on the franchise agreement's effective date for initial adjustments, or from the date of the last fee adjustment for subsequent adjustments.
Kidokinetics will notify franchisees of any CPI adjustment at least 60 days before the adjustment takes effect. Furthermore, Kidokinetics is limited to implementing no more than one CPI-based fee adjustment in any calendar year.
It's important to note that these CPI adjustments do not affect fees that Kidokinetics reserves the right to increase in higher amounts or adjust more frequently, such as the Technology Fee. This means that while some fees are capped in terms of adjustment frequency and tied to the CPI, others are not and could be subject to more frequent or substantial changes.