What non-operating expenses are NOT included in the 'Adjusted Net Operating Income' for a Kidokinetics franchise?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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- "Adjusted Net Operating Income" equals Gross Sales less Disclosed Operating Expenses and Franchise Related Adjustments. Adjusted Net Operating Income is not net profit and does not include all operating expenses or any non-operating expenses such as taxes, interest, depreciation and amortization
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the Adjusted Net Operating Income is calculated by subtracting Disclosed Operating Expenses and Franchise Related Adjustments from Gross Sales. However, it's crucial to understand that this Adjusted Net Operating Income is not the same as net profit.
Specifically, the Adjusted Net Operating Income for a Kidokinetics franchise does not include all operating expenses, nor does it account for any non-operating expenses. The non-operating expenses that are excluded from the Adjusted Net Operating Income calculation are taxes, interest, depreciation, and amortization.
Therefore, a prospective Kidokinetics franchisee should recognize that the Adjusted Net Operating Income figure is a preliminary calculation. It is essential to conduct an independent investigation of all costs and expenses, including these non-operating expenses, to determine the true net income or profit potential of a Kidokinetics franchise.