What is the transfer fee for the first Kidokinetics business that a franchisee transfers?

According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee must pay a transfer fee to Kidokinetics when transferring ownership of their franchise. The transfer fee is $10,000 for the first Kidokinetics business that a franchisee transfers. However, the fee changes if Kidokinetics agrees to extend the transferee's term to ten years under a new franchise agreement. In this case, the transfer fee is replaced by Kidokinetics's then-current initial franchise fee under the new franchise agreement.

This means that if a franchisee decides to sell their Kidokinetics business, they will likely need to pay $10,000 to Kidokinetics for the transfer. This fee compensates Kidokinetics for the administrative work involved in approving the transfer and updating the franchise agreement. It also ensures that Kidokinetics maintains control over who becomes a franchisee and that the new franchisee meets their standards.

However, if Kidokinetics and the new franchisee agree to a new ten-year franchise agreement, the transfer fee is waived, and the new franchisee pays the standard initial franchise fee instead. This could be more or less than the $10,000 transfer fee, depending on what the initial franchise fee is at that time. This incentivizes new franchisees to commit to a longer-term agreement with Kidokinetics.

It is important for prospective franchisees to understand these transfer fees and how they could impact their investment if they decide to sell their Kidokinetics business in the future. They should also inquire about the current initial franchise fee to understand the potential costs associated with a transfer involving a new franchise agreement.