Where are the standards and requirements for Kidokinetics advertising set forth?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
12. ADVERTISING, PROMOTIONS AND RELATED FEES
12.1. Advertising Programs. Franchisor may, from time to time, develop and administer advertising and sales promotion programs designed to promote and enhance the collective success of all Kidokinetics franchises operating under the System. Franchisee shall participate in all such advertising and sales promotion programs in accordance with the terms and conditions established by Franchisor from time to time for each program. In all aspects of these programs, including, without limitation, the type, quantity, timing, placement and choice of media, market areas and advertising agencies, the standards and specifications established by Franchisor, as modified from time to time, will be final and binding upon Franchisee.
12.2. Local Marketing.
12.2.1. In addition to the ongoing advertising contributions set forth herein, Franchisee shall spend annually, throughout the term of this Agreement, the greater of $500 or 2% of Gross Sales per
month on a rolling 12-month average ("Local Marketing Requirement") on advertising for the Kidokinetics Business within the Territory ("Local Marketing"). Franchisee is not required to spend more than the Local Marketing Requirement, but there is no limit on the amount Franchisee may spend on local advertising. Franchisor does not impose an additional Local Marketing Requirement for a single franchisee operating up to four outlets if they are operated by the same legal entity and have adjacent territories. On or before the 1st day of February each year, Franchisee must submit to Franchisor a Local Marketing expenditure report accurately reflecting such expenditures for the preceding annual period. If that day is not a business day, then such report will be due on the next business day. The following costs and expenditures incurred by Franchisee will not be included in Franchisee's expenditures on Local Marketing for purposes of this Section, unless approved in advance by Franchisor in writing: (i) incentive programs for employees or agents of Franchisee; (ii) research expenditures; (iii) salaries and expenses of any of Franchisee's personnel to attend advertising meetings, workshops or other marketing activities; or (iv) charitable, political or other contributions or donations. We may require you to subscribe to the email marketing subscription program we designate, such as Constant Contact or other similar email marketing programs, at your sole cost and expense. The fee for this is determined by the provider.
- 12.2.2. In addition to the requirements of Section 12.2.1, Franchisee must: (a) before Franchisee commences operation of the Kidokinetics Business on the date designated by Franchisor, pay to Franchisor the sum of: (i) $5,000 for the Initial Marketing Package, if this is Franchisee's first Territory; or (ii) $1,000 for the Initial Marketing Package, if this is a Franchise Agreement for an additional Territory).
- 12.3. Regional Advertising and Promotional Cooperatives. Franchisor will have the right, in Franchisor's discretion, to designate any geographical area for purposes of establishing a regional advertising and promotional cooperative ("Cooperative"), and to determine whether a Cooperative is applicable to the Kidokinetics Business.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the standards and requirements for advertising are detailed in Section 12.1, titled "Advertising Programs," and further clarified in Section 12.5, "Approval of Advertising." These sections stipulate that Kidokinetics may develop and administer advertising programs to promote the success of all franchises, and franchisees must participate in these programs according to the terms set by Kidokinetics. The standards and specifications established by Kidokinetics are final and binding on the franchisee, covering aspects such as the type, quantity, timing, placement, and choice of media.
Furthermore, all advertising and promotional activities conducted by the franchisee must be professional and conform to Kidokinetics' standards, as outlined in the Franchise Operations Manual or elsewhere. Franchisees are required to submit all advertising and promotional plans and materials to Kidokinetics for approval, excluding social media content as addressed in Section 12.6. Kidokinetics will then approve or disapprove the submitted materials within 15 business days. Franchisees are prohibited from using unapproved materials and must discontinue using any materials, even if previously approved, upon notice from Kidokinetics.
In addition to these overarching guidelines, franchisees are obligated to spend a minimum amount on local marketing, specifically the greater of $500 or 2% of gross sales per month on a rolling 12-month average. This spending must be reported to Kidokinetics annually by February 1st. Certain costs, such as employee incentive programs or charitable donations, are excluded from local marketing expenditure unless approved in writing by Kidokinetics. Franchisees must also engage in paid internet advertising through platforms like Google, Yahoo, and Bing, with these fees potentially credited towards their local marketing requirement. These measures ensure brand consistency and quality across all Kidokinetics franchise locations.
Kidokinetics also has the right to designate geographical areas for regional advertising cooperatives, in which franchisees must participate. These cooperatives are responsible for administering regional advertising programs and developing standardized advertising materials, all subject to Kidokinetics' approval. Franchisees must submit their weekly contributions to the cooperative, along with any required reports. Kidokinetics may grant exemptions from cooperative membership under certain conditions, with their decision being final. These advertising guidelines and requirements are designed to maintain a consistent brand image and ensure effective marketing strategies across the Kidokinetics franchise system.