What specific expenses were excluded from the NW Broward Kidokinetics location's operating expenses?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
siness owner. For the NW Broward Location, we deleted equipment expenses for non-standard equipment that is not used by our other Franchised Locations. For the North Carolina Location, we excluded uncategorized discretionary operating expenses. 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.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 46–54)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the disclosed operating expenses for the NW Broward location do not include all operating expenses. Specifically, the document states that equipment expenses for non-standard equipment not used by other Kidokinetics franchised locations were excluded. Additionally, the payroll wages of the owners and managers were excluded from the disclosed operating expenses, though payroll taxes paid in connection with their payroll were included.
This exclusion of certain expenses means that the financial performance data presented may not reflect the full costs a new franchisee might incur. A prospective franchisee should carefully consider these exclusions and conduct their own due diligence to estimate the potential impact on their profitability. Understanding which expenses are not included in the disclosed operating expenses is crucial for creating a realistic financial model.
It is important to note that the NW Broward location operates in a combined three-territory location. The FDD also mentions that this location operates under a prior form of Franchise Agreement with alternative fee structures, paying a reduced Royalty Fee and not paying a Brand Development Fund Contribution or technology fees. These differences in operational structure and fee arrangements compared to the current franchise agreement could further impact the comparability of the NW Broward location's financial performance to that of a new Kidokinetics franchise.