If a Kidokinetics franchisee upgrades their software, who is responsible for the increase in fees?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ER FEES
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | The greater of 8% of Gross Sales (2) or the "Minimum Royalty" (3) | Due on Wednesday of\neach week for percentage-based Royalty; Monthly for the Minimum Royalty | The "Royalty" is based on "Gross Sales" during the previous week. Your Royalty is an ongoing payment that allows you to use the Marks and the intellectual property of the System and pays for our ongoing support and assistance. See Note 3 for a breakout of the Minimum Royalty by timeframe of operation. |
| Brand Development | 2% of Gross Sales | Weekly | You must pay us a brand development fund contribution of 2% of Gross Sales at the same time as the Royalty. We may use the brand development fund for any purpose we determine. |
| Fund Contribution | |||
| Technology Fee | The then-current fee (currently $475 per month with an additional fee of $6 per month if you request additional email addresses) | Monthly | This fee covers certain technologies used in the operation of your Kidokinetics Business and includes up to four e-mail addresses, our KIDOLINK software, access to our Kidokinetics workspace on Slack, and up to two seats on Monday.com, our workflow management and customer relationship management tool. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the franchisee is responsible for any increase in fees that result from software upgrades, modifications, or additional services.
The standard technology fee is currently $475 per month, which includes up to four email addresses, KIDOLINK software, access to the Kidokinetics workspace on Slack, and up to two seats on Monday.com. There is an additional $6 monthly fee for each additional email address requested. The technology fee may include fees paid to third-party vendors and may be adjusted to reflect their price increases.
This means that if a franchisee chooses to upgrade their software or request additional services beyond what is included in the standard technology package, they will be responsible for covering the resulting increase in fees. This is a common practice in franchising, as it ensures that franchisees who opt for additional services bear the costs associated with those services.