Is there a limit to how much a Kidokinetics franchisee can spend on local advertising?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ing 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
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, there is no limit to how much a franchisee may spend on local advertising. However, Kidokinetics requires franchisees to spend a minimum amount annually on local marketing, which is the greater of $500 or 2% of Gross Sales per month on a rolling 12-month average.
This means a franchisee must, at a minimum, allocate either a flat $500 or 2% of their gross sales each month (calculated as a 12-month rolling average) towards local advertising initiatives. This requirement ensures that franchisees actively promote their Kidokinetics business within their territory.
While franchisees are obligated to meet this minimum spending threshold, they are free to exceed it if they choose. This allows franchisees to invest more heavily in local marketing efforts to further grow their business and increase brand awareness in their specific area. Franchisees must submit a Local Marketing expenditure report accurately reflecting such expenditures for the preceding annual period on or before the 1st day of February each year.