What specific expenses were excluded from the North Carolina Kidokinetics location's operating expenses?

According to Kidokinetics's 2024 Franchise Disclosure Document, the disclosed operating expenses for the North Carolina location do not include all operating expenses. Specifically, the expenses exclude the payroll wages of the owners and managers. However, the payroll taxes paid in connection with the payroll of these owners and managers were not excluded. Additionally, uncategorized discretionary operating expenses were excluded from the North Carolina location's operating expenses.

This means that a prospective franchisee reviewing the financial performance of the North Carolina location should be aware that the reported operating expenses are not fully comprehensive. The omission of owner and manager salaries, as well as uncategorized discretionary expenses, could significantly impact the overall profitability assessment of the franchise. A potential franchisee needs to account for these costs when projecting their own potential earnings.

It's important to note that the FDD clarifies that the expenses include actual amounts paid to locations where Kidokinetics programs are held, including revenue and profit-sharing fees and other rental fees charged by these facilities. For the North Carolina location, these facility expenses are listed as a "Location Fee." This provides some clarity on what is included within the reported expenses, but the franchisee must still consider the excluded expenses to get a complete financial picture.

Therefore, a prospective Kidokinetics franchisee should carefully consider these exclusions and conduct their own due diligence to estimate the potential costs associated with owner/manager salaries and discretionary spending. This may involve speaking with existing franchisees, consulting with a financial advisor, and developing a detailed business plan that accounts for all potential expenses.