What was the total amount of royalty fees Kidokinetics collected in 2022?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
23, 2022, and 2021
| 2023 | 2022 | 2021 | |||
|---|---|---|---|---|---|
| Operating revenue | |||||
| Initial franchise fees | $ 2,796,637 | $ | 689,548 | $ | 281,000 |
| Royalty fees | 201,199 | 86,911 | 56,577 | ||
| Service revenue | 467,961 | 87,473 | - | ||
| Advertising fees | 29,635 | - | - | ||
| Apparel sales | 13,774 | 27,823 | - | ||
| Total operating revenue | 3,509,206 | 891,755 | 337,577 | ||
| Operating expenses |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, the total royalty fees collected in 2022 amounted to $86,911. This figure represents the income Kidokinetics received from its franchisees based on a percentage of their sales. Royalty fees are a standard component of franchise agreements, serving as ongoing compensation to the franchisor for the use of their brand, systems, and support.
For a prospective Kidokinetics franchisee, understanding the franchisor's revenue streams is crucial. Royalty fees contribute significantly to Kidokinetics' financial health and ability to provide ongoing services. The amount of royalty fees collected can indicate the overall performance and revenue generation of the franchise system. A higher royalty fee collection generally suggests a healthier and more profitable franchise network.
It's important to note that royalty fees are typically calculated as a percentage of gross sales, as mentioned in Item 21. Franchisees should carefully review their franchise agreement to understand the exact percentage and how it is applied to their revenue. This information helps franchisees forecast their expenses and profitability accurately. The collection of $86,911 in royalty fees during 2022 reflects the financial interactions between Kidokinetics and its franchisees, highlighting the importance of this revenue stream for the franchisor.