Is the Kidokinetics Royalty Fee based on Gross Sales from the previous week or the current week?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ER FEES
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | The greater of 8% of Gross Sales (2) or the "Minimum Royalty" (3) | Due on Wednesday of\neach week for percentage-based Royalty; Monthly for the Minimum Royalty | The "Royalty" is based on "Gross Sales" during the previous week. Your Royalty is an ongoing payment that allows you to use the Marks and the intellectual property of the System and pays for our ongoing support and assistance. See Note 3 for a breakout of the Minimum Royalty by timeframe of operation. |
| Brand Development | 2% of Gross Sales | Weekly | You must pay us a brand development fund contribution of 2% of Gross Sales at the same time as the Royalty. We may use the brand development fund for any purpose we determine. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the royalty fee is based on the previous week's gross sales. Franchisees are required to pay the greater of 8% of gross sales or a minimum royalty amount. This royalty payment is due on Wednesday of each week.
The 8% royalty fee is an ongoing payment that allows the franchisee to use Kidokinetics's marks and intellectual property, and it also covers the ongoing support and assistance provided by the company. In addition to the weekly royalty based on gross sales, Kidokinetics franchisees must also pay a minimum royalty. If the total weekly royalties paid during the month are less than the minimum royalty amount, the franchisee must pay the difference at the end of the month to meet the minimum royalty obligation.
Kidokinetics provides a grace period before franchisees are required to pay minimum royalties. This grace period lasts for 90 days, starting from the day the franchisee successfully completes initial training. If a franchisee purchases multiple franchises simultaneously, the grace period is extended for the second through fourth franchises. The minimum royalty varies based on the timeframe of operation, starting at $600 per month for the first 12 months after the grace period, then increasing to $800 per month for months 13 to 24, and finally to $1,000 per month for months 25 and beyond.