What is the minimum annual amount a Kidokinetics franchisee must spend on local marketing?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ing upon Franchisee.
12.2. Local Marketing.
12.2.1. In addition to the ongoing advertising contributions set forth herein, Franchisee shall spend annually, throughout the term of this Agreement, the greater of $500 or 2% of Gross Sales per
month on a rolling 12-month average ("Local Marketing Requirement") on advertising for the Kidokinetics Business within the Territory ("Local Marketing"). Franchisee is not required to spend more than the Local Marketing Requirement, but there is no limit on the amount Franchisee may spend on local advertising. Franchisor does not impose an additional Local Marketing Requirement for a single franchisee operating up to four outlets if they are operated by the same legal entity and have adjacent territories. On or before the 1st day of February each year, Franchisee must submit to Franchisor a Local Marketing expenditure report accurately reflecting such expenditures for the preceding annual period. If that day is not a business day, then such report will be due on the next business day. The following costs and expenditures incurred by Franchisee will not be included in Franchisee's expenditures on Local Marketing for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; or (iv) charitable, political or other contributions or donations. We may require you to subscribe to the email marketing subscription program we designate, such as Constant Contact or other similar email marketing programs, at your sole cost and expense
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to the 2024 Kidokinetics Franchise Disclosure Document, franchisees are required to spend a minimum amount annually on local marketing. This requirement is the greater of $500 or 2% of the franchisee's gross sales per month, calculated on a rolling 12-month average. This local marketing expenditure must be maintained throughout the term of the Franchise Agreement.
The Kidokinetics FDD specifies that while franchisees are not obligated to exceed this minimum local marketing expenditure, there is no limit to how much they can spend on local advertising. Franchisees must submit an annual report to Kidokinetics by February 1st each year, detailing their local marketing expenditures for the previous year.
Certain costs and expenditures are excluded from counting towards the local marketing requirement unless pre-approved by Kidokinetics in writing. These exclusions include employee incentive programs, research expenditures, salaries and expenses for personnel attending advertising meetings, and charitable or political contributions. Kidokinetics may also require franchisees to subscribe to a designated email marketing program, such as Constant Contact, at the franchisee's own expense, with the fee determined by the provider.
Franchisees should be aware of these requirements and exclusions to ensure compliance with the local marketing obligations outlined in the Franchise Agreement. Understanding these terms is crucial for budgeting and planning marketing activities effectively.