What is the minimum royalty fee for a Kidokinetics franchise after month 25?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ollows:
| Timeframe | Minimum Royalty |
|---|---|
| First 12 months (Beginning after the Grace | $600 per month |
| Period Expiration) | $600 per month |
| Months 13 to 24 | $800 per month |
| Months 25+ | $1,000 per |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, after the first 24 months of operation (following the initial grace period), franchisees are obligated to pay a minimum royalty fee of $1,000 per month. This minimum royalty payment is in place to ensure that Kidokinetics receives a consistent revenue stream from each franchise location.
In addition to the minimum royalty, Kidokinetics franchisees must also pay 8% of their gross sales as a royalty fee. The franchisee is required to pay the greater of the two amounts (8% of gross sales or the minimum royalty fee). Franchisees pay 8% of gross sales on a weekly basis, and at the end of the month, if the total weekly royalties paid are less than the minimum royalty amount, the franchisee must pay the difference.
It's important to note that these fees are current as of the issuance date of the 2024 Franchise Disclosure Document and are subject to change. Kidokinetics may increase fixed dollar amount fees based on changes to the Consumer Price Index (CPI), but only if the increase to the CPI is more than 5% higher than the corresponding CPI in effect on the effective date of the Franchise Agreement or the date of the last fee adjustment. Kidokinetics will provide franchisees with at least 60 days' notice before any CPI-related fee adjustment becomes effective, and will implement no more than one CPI-related fee adjustment during any calendar year.
Prospective franchisees should carefully consider these royalty obligations and factor them into their financial projections. Understanding the interplay between the percentage-based royalty and the minimum royalty is crucial for managing cash flow and ensuring profitability. Franchisees should also inquire about any potential CPI-related adjustments to the minimum royalty fee to accurately forecast their ongoing expenses.