Is there a maximum limit to the amount Kidokinetics can charge for the Technology Fee?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
ER FEES
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fee | The greater of 8% of Gross Sales (2) or the "Minimum Royalty" (3) | Due on Wednesday of\neach week for percentage-based Royalty; Monthly for the Minimum Royalty | The "Royalty" is based on "Gross Sales" during the previous week. Your Royalty is an ongoing payment that allows you to use the Marks and the intellectual property of the System and pays for our ongoing support and assistance. See Note 3 for a breakout of the Minimum Royalty by timeframe of operation. |
| Brand Development | 2% of Gross Sales | Weekly | You must pay us a brand development fund contribution of 2% of Gross Sales at the same time as the Royalty. We may use the brand development fund for any purpose we determine. |
| Fund Contribution | |||
| Technology Fee | The then-current fee (currently $475 per month with an additional fee of $6 per month if you request additional email addresses) | Monthly | This fee covers certain technologies used in the operation of your Kidokinetics Business and includes up to four e-mail addresses, our KIDOLINK software, access to our Kidokinetics workspace on Slack, and up to two seats on Monday.com, our workflow management and customer relationship management tool. |
Source: Item 6 — OTHER FEES (FDD pages 13–17)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the Technology Fee is currently $475 per month, with an additional $6 per month for each requested email address exceeding the included four. The FDD indicates that this fee may be adjusted to reflect price increases from third-party vendors. Additionally, franchisees are responsible for any fee increases resulting from upgrades, modifications, or additional services or software.
This fee covers technologies used in the operation of the Kidokinetics business, including up to four email addresses, KIDOLINK software, access to the Kidokinetics workspace on Slack, and up to two seats on Monday.com, which is their workflow management and customer relationship management tool. The technology fee will cover up to four Kidokinetics Businesses if they are operated by the same legal entity and have adjacent territories.
While the Technology Fee can be adjusted, the FDD does not explicitly state a maximum limit on the amount Kidokinetics can charge. The fee can increase due to third-party vendor price increases or if the franchisee opts for upgrades or additional services. This means that the monthly Technology Fee could potentially rise above the initially stated $475, depending on these factors.
Prospective franchisees should consider the potential for these increases when budgeting for ongoing operating expenses. It would be prudent to discuss with Kidokinetics the typical range of technology fee adjustments and the factors that could lead to higher costs to better understand the potential financial implications.