Are Kidokinetics' standards, specifications, and other criteria for supplier or distributor approval considered confidential information?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
Our approval process generally focuses on the supplier's dependability, general reputation and ability to provide sufficient quantity of product or services, and the products' or services' prices and quality. Our standards, specifications and other criteria for supplier or distributor approval have been developed by us, our principals and our affiliates through the expenditure of extensive work and time and are considered confidential information. We do not make our standards and specifications or our other criteria for supplier
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–24)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the standards, specifications, and other criteria for supplier or distributor approval are considered confidential information. Kidokinetics does not make these standards and specifications available to franchisees or approved suppliers. This means a prospective franchisee will not have access to the specific details Kidokinetics uses to evaluate and approve suppliers.
If a franchisee wants to use a supplier or service that Kidokinetics has not already approved, they must submit sufficient information, specifications, or samples to Kidokinetics for evaluation. The franchisee is responsible for reimbursing Kidokinetics for all reasonable expenses associated with this approval process. Kidokinetics will then decide, typically within 30 days, whether to approve the item, service, or supplier. However, Kidokinetics retains the right to withdraw approval later based on the supplier's performance, changes in specifications, standards, or other reasons.
Kidokinetics' approval process generally focuses on a supplier's dependability, reputation, ability to provide sufficient quantities, and the prices and quality of their products or services. This restriction on sourcing aims to maintain quality and consistency across all Kidokinetics franchises, but it also limits a franchisee's autonomy in choosing suppliers and potentially finding more cost-effective options. Franchisees should be aware that a significant portion of their expenditures, estimated between 30% to 80% for initial setup and 25% to 30% on an ongoing basis, will be directed towards Kidokinetics or its approved suppliers.
Kidokinetics also reserves the right to limit the number of potential suppliers considered for approval and may designate exclusive suppliers for certain product or service categories. This further restricts a franchisee's options and could impact their operational costs and flexibility. Franchisees should carefully consider these restrictions and their potential impact on their business before investing in a Kidokinetics franchise.