Does Kidokinetics have an obligation to pass on rebates from suppliers to franchisees?

According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics and its affiliates may receive rebates from suppliers based on franchisee purchases, but they are not obligated to pass these rebates on to franchisees or use them in any specific way. This means that Kidokinetics retains any rebates or volume discounts they receive from suppliers.

This policy is fairly common in franchising, where franchisors often negotiate discounts with suppliers based on the collective buying power of the franchise system. The franchisor may use these rebates to offset their own costs, invest in system-wide improvements, or increase their profitability. While franchisees may indirectly benefit from these arrangements through a stronger brand or improved services, they are not entitled to a direct share of the rebates.

For a prospective Kidokinetics franchisee, this means that the cost of goods and services purchased from approved suppliers may not reflect any rebates or discounts received by Kidokinetics. It is important to factor this into the overall cost analysis when evaluating the franchise opportunity. Franchisees should inquire about the potential for cost savings through supplier negotiations and understand how Kidokinetics uses the rebates it receives.