Does Kidokinetics reserve the right to contribute or loan additional funds to the Brand Development Fund?

According to Kidokinetics's 2024 Franchise Disclosure Document, Kidokinetics retains the right to contribute or loan additional funds to the Brand Development Fund. The funds can be contributed on terms Kidokinetics deems reasonable. Any unused funds collected in a calendar year will be applied to the following year's funds.

Kidokinetics franchisees are required to pay 2% of their weekly Gross Sales to the Brand Development Fund. These contributions are used for marketing, developing, and promoting the Kidokinetics system, marks, and franchises. Kidokinetics has complete discretion on how the Brand Development Fund will be utilized, including for local, regional, or national marketing, or any expenditure that Kidokinetics deems necessary or appropriate to promote or improve the Kidokinetics system or brand.

While Kidokinetics will separately account for all Brand Development Fund contributions, they are not required to segregate these funds from their other monies. The Brand Development Fund is not audited, but Kidokinetics will provide an annual accounting upon written request, showing how the funds were spent in the previous year. For the fiscal year ended December 31, 2023, 100% of the Brand Development Fund Contributions were spent on administration.

This arrangement is fairly typical in franchising, where franchisors often manage a brand fund to support system-wide marketing efforts. Franchisees should be aware that while they contribute to the fund, Kidokinetics has broad discretion over how the money is spent, and there is no guarantee that these expenditures will directly benefit each franchisee.