Does Kidokinetics have an obligation to use rebates received from suppliers in any particular manner?

According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics and its affiliates may receive rebates from suppliers based on franchisee purchases of products and services. However, Kidokinetics has no obligation to pass these rebates on to franchisees or use them in any specific way. This means that Kidokinetics retains the right to use these rebates as it sees fit, which could include reinvesting them in the company, distributing them to owners, or using them for other business purposes.

This arrangement is fairly common in franchising, where franchisors often negotiate volume discounts or rebates with suppliers due to the collective purchasing power of their franchise network. While some franchisors may choose to share a portion of these savings with their franchisees, Kidokinetics is not contractually obligated to do so.

For a prospective franchisee, this means that while you may indirectly contribute to rebates received by Kidokinetics through your purchases, you should not expect to directly benefit from these rebates. It is important to factor this into your financial projections and understand that the franchisor benefits from these arrangements. Franchisees should inquire about the typical range of rebates Kidokinetics receives and how these funds are utilized to better understand the financial dynamics of the franchise system.