What does the Kidokinetics Royalty Fee pay for?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
| 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 | |
| each 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. |
-
- Royalty Fee: "Gross Sales" means the revenues you receive from the sale of all goods, services and products sold at, from, or through the Kidokinetics Business or made pursuant to the rights granted hereunder, and all other income of every kind and nature related to the Kidokinetics Business, whether from cash or credit or otherwise, and regardless of collection in the case of credit, including the full redemption value of any gift card, gift certificate or coupon sold for use in the Kidokinetics Business (fees retained by or paid to third-party sellers of such gift cards, gift certificates or coupons are not excluded from this calculation), and all proceeds from any business interruption insurance.
It does not include (i) any sales tax or other taxes collected from customers for, and turned over to, the governmental authority imposing the tax, (ii) properly documented refunds to customers, or (iii) properly documented employee discounts (limited to 3% of Gross Sales).
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.
| Timeframe | Minimum Royalty |
|---|---|
| First 12 months (Beginning after the Grace | $600 per month |
| Period Expiration) | $600 per month |
| Months 13 to 24 | $800 per month |
| Months 25+ | $1,000 per month |
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 allows franchisees to use the Kidokinetics Marks and intellectual property of the System. It also covers the ongoing support and assistance that Kidokinetics provides to its franchisees.
The Royalty Fee is the greater of 8% of Gross Sales or a Minimum Royalty amount. The 8% of Gross Sales is paid weekly, while any additional amount to meet the Minimum Royalty is paid monthly. 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 13-24, and finally to $1,000 per month for months 25 and beyond.
Kidokinetics franchisees receive a grace period before they are required to pay Minimum Royalties, which lasts for 90 days after completing initial training. If a franchisee purchases multiple Kidokinetics franchises simultaneously, the grace period is extended for the second through fourth franchises. It is important to note that the Royalty Fee is based on Gross Sales, which includes all revenues from goods, services, and products sold through the Kidokinetics Business, including the full redemption value of gift cards or certificates. However, it excludes sales tax, documented refunds to customers, and documented employee discounts up to 3% of Gross Sales.