For how long must a Kidokinetics franchisee maintain financial records?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee must maintain, for at least five fiscal years from their preparation, complete financial records for the operation of the Kidokinetics Business in accordance with the then current Internal Revenue Service Publication and must provide Franchisor, at Franchisor's request, with: (i) a weekly Sales Report signed by Franchisee and in the form Franchisor specifies that contains the sales information pertaining to the preceding week including, without limitation, a summary of all monies received during the relevant period, any other additional information which Franchisor deems necessary to properly evaluate Franchisee's progress; (ii) a quarterly income statement and profit and loss statement, reflective of the three individual months in the quarter, in a format specified by Franchisor, including a standard chart of accounts, within 20 days after the end of each quarter; (iii) annual financial reports and operating statements in the form Franchisor specifies within 50 days after the close of each of Franchisee's fiscal years; (iv) state and local sales tax returns or reports and federal, state and local income tax returns for each year in which Franchisee's Kidokinetics Business is operated, within 30 days after their timely completion; and (v) such other reports as Franchisor may from time to time require, in the form and at the time Franchisor prescribes.
Franchisee's fiscal year must be on a calendar year basis.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to maintain complete financial records for their Kidokinetics business for at least five fiscal years from the date of their preparation. These records must adhere to the then-current Internal Revenue Service (IRS) guidelines.
In practical terms, this means a Kidokinetics franchisee must diligently keep all financial documents, such as sales reports, income statements, profit and loss statements, and tax returns, organized and accessible for a minimum of five years. This obligation ensures compliance with both the franchisor's requirements and IRS regulations. The franchisee's fiscal year must be on a calendar year basis.
Kidokinetics also requires franchisees to provide various financial reports to the franchisor upon request. These include weekly sales reports, quarterly income statements and profit and loss statements (within 20 days after each quarter's end), annual financial reports and operating statements (within 50 days after the fiscal year's end), and state/local sales tax returns and federal/state/local income tax returns (within 30 days of completion). This ongoing reporting helps Kidokinetics monitor the franchisee's performance and ensure system-wide financial consistency.