When is the Minimum Royalty Fee due 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. 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. We may charge an additional fee for more than four e-mail addresses (currently, $6 per month per email). This fee may include fees paid to third-party vendors and it may be adjusted to reflect their price increases. This fee will cover up to four Kidokinetics Businesses so long as they are operated by the same legal entity and have adjacent territories. You will also be responsible for any increase in fees that result from any upgrades, modifications or additional services or software. |
| Local Advertising | The greater of $500 per month, or 2% of Gross Sales per month on a rolling 12- month average | Monthly | You must spend this amount on local advertising and marketing purposes. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, franchisees are obligated to pay the greater of 8% of gross sales or a minimum royalty fee. While the 8% royalty is paid weekly, the minimum royalty fee is paid monthly. Specifically, if the total weekly royalty payments for a given month are less than the minimum royalty amount, the franchisee must pay the difference at the end of the month to meet their minimum royalty obligation.
Kidokinetics franchisees receive a grace period of 90 days after completing initial training before they are required to pay minimum royalties. This grace period provides new franchisees with some financial flexibility as they start their business. The minimum royalty fee varies depending on the timeframe of operation. For the first 12 months after the grace period, the minimum royalty is $600 per month. It then increases to $800 per month for months 13 to 24, and to $1,000 per month for months 25 and beyond.
For franchisees who purchase multiple Kidokinetics franchises simultaneously, the grace period is extended for the second through fourth franchises. This tiered structure aims to support franchisees who are expanding their operations by providing additional time to meet the minimum royalty obligations for each new franchise. All fees, including the minimum royalty, are subject to potential adjustments based on changes in the Consumer Price Index (CPI), but Kidokinetics will provide at least 60 days' notice before any such adjustment takes effect, and will only implement one CPI-related fee adjustment per calendar year.