When does the obligation to pay royalties begin for a Kidokinetics franchisee?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
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- Royalty Fee: The obligation to pay Royalties begins upon completion of your initial training. You will be required to pay the greater of 8% of Gross Sales or the "Minimum Royalty" (described below). You will pay 8% of Gross Sales on a weekly basis. At the end of the month, if the Minimum Royalty amount is greater than the total weekly Royalties paid that month, you will pay us the difference in order to meet your Minimum Royalty obligation. You will receive a grace period ("Grace Period") before you are required to begin paying Minimum Royalties. The Grace Period will be for 90 days beginning on the day you successfully complete the initial training and will expire after 90 days. If you purchase multiple franchises at the same time, you will receive an increased Grace Period for your second through fourth franchises as summarized below.
The Grace Periods are as follows:
| Franchise Number | Grace Period in Months Following Grace Period | |
|---|---|---|
| Expiration | ||
| 2 | 12 months | |
| 3 | 24 months | |
| 4 | 36 months |
The "Minimum Royalty" is as follows:
| Timeframe | Minimum Roya
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the obligation to pay royalties begins upon completion of the initial training program. The royalty fee is the greater of 8% of gross sales or a minimum royalty amount. The 8% of gross sales is paid weekly. If, at the end of the month, the total weekly royalties paid are less than the minimum royalty amount, the franchisee must pay the difference.
Kidokinetics franchisees are given a grace period of 90 days after completing initial training before they are required to pay the minimum royalty. If a franchisee purchases multiple franchises simultaneously, the grace period is extended for the second through fourth franchises.
The minimum royalty due from a Kidokinetics franchise during the first 12 months after the grace period is $600 per month. From months 13 to 24, the minimum royalty increases to $800 per month. After 24 months, the minimum royalty is $1,000 per month.