When does the standard Kidokinetics transfer fee get replaced by the initial franchise fee?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
on the circumstances of the transfer or otherwise.
- 15.4. Transfer Fee. As a condition to any Transfer, Franchisee shall pay Franchisor a transfer fee equal to $10,000 for the first Kidokinetics business that Franchisee transfers and $5,000 for each subsequent or additional Kidokinetics Business that Franchisee Transfers (the "Transfer Fee"). If Franchisor agrees to extend the transferee's term to ten (10) years under a new franchise agreement, the Transfer Fee will be replaced by the Franchisor's then-current initi
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the standard transfer fee is replaced by the then-current initial franchise fee if Kidokinetics agrees to extend the transferee's term to ten years under a new franchise agreement.
For a Kidokinetics franchisee, this means that when transferring their franchise, they typically pay a transfer fee: $10,000 for the first Kidokinetics business transferred and $5,000 for each subsequent business transferred. However, if the new owner (transferee) is granted a new franchise agreement with a fresh ten-year term, the transfer fee is waived. Instead, the transferee pays the full initial franchise fee that Kidokinetics is charging new franchisees at that time.
This policy could incentivize a franchisee to negotiate for a longer term for the buyer, as it eliminates the transfer fee. However, the new franchisee will have to pay the full initial franchise fee, which may be significantly higher than the transfer fee. The initial franchise fee is not specified in this excerpt.