Does Kidokinetics guarantee that advertising expenditures from the Brand Development Fund will directly benefit a franchisee?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
We are not obligated to spend any amount on advertising in the geographical area where you are or will be located. We do not guarantee that advertising expenditures from the Brand Development Fund will benefit you or any other franchisee directly, on a pro rata basis, or at all. We are not obligated to spend any amount on advertising in the geographical area where you are or will be located. We will not use the Brand Development Fund Contributions for advertising that is principally a solicitation for the sale of Franchises, but we reserve the right to include a notation in any advertisement or website indicating "Franchises Available" or similar phrasing.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–34)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics does not guarantee that advertising expenditures from the Brand Development Fund will directly benefit a franchisee. Kidokinetics retains complete discretion over how the Brand Development Fund is used and is not obligated to spend any amount on advertising in a franchisee's specific geographical area.
This means that while franchisees are required to contribute 2% of their weekly Gross Sales to the Brand Development Fund, there is no assurance that these funds will be used in a way that directly benefits their individual Kidokinetics business. The funds may be used for local, regional, or national marketing efforts, or any expenditure that Kidokinetics deems necessary to promote the Kidokinetics system or brand.
This lack of guarantee is a common practice in franchising, where franchisors often pool advertising funds to promote the brand as a whole, rather than focusing solely on individual franchisee needs. While this approach can benefit the entire system, it also means that some franchisees may not see a direct return on their contributions to the Brand Development Fund. A prospective franchisee should consider this when evaluating the potential costs and benefits of investing in a Kidokinetics franchise.