What is the threshold for understating Gross Sales that triggers a default for a Kidokinetics franchisee?

According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee will be in default if they understate Gross Sales by specific thresholds. If a Kidokinetics franchisee understates Gross Sales by 5% at any time, it constitutes a default under the agreement.

Additionally, understating Gross Sales by any amount on three or more occasions also triggers a default, regardless of whether the franchisee corrected the issue on any of those prior occasions. This means even small discrepancies, if repeated, can lead to serious consequences.

These stipulations highlight the importance of accurate financial reporting for Kidokinetics franchisees. Franchisees must maintain meticulous records and ensure their sales reports are precise to avoid breaching the franchise agreement and facing potential termination.