What is the minimum amount required for Local Advertising per month for a Kidokinetics franchise?
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. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are required to spend a minimum of $500 per month on local advertising. However, the actual amount could be higher, as Kidokinetics mandates that franchisees spend the greater of $500 or 2% of their Gross Sales per month, calculated on a rolling 12-month average. This means that if 2% of a franchisee's average monthly Gross Sales over the past year exceeds $500, they must spend that higher amount on local advertising.
This requirement ensures that Kidokinetics franchisees actively promote their businesses within their local territories. The flexibility of using either a fixed amount or a percentage of gross sales allows the advertising expenditure to scale with the business's revenue. This approach is fairly common in franchising, where franchisors often require franchisees to contribute to both a national marketing fund and local advertising efforts.
For a prospective Kidokinetics franchisee, it's crucial to understand how this local advertising requirement will impact their monthly expenses and to factor it into their financial projections. They should also inquire about what types of advertising and marketing activities qualify towards meeting this obligation. Understanding the franchisor's expectations and guidelines for local advertising is essential for effective marketing and compliance with the franchise agreement.