Under what circumstances would a Kidokinetics franchisee be required to pay an initial software fee?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
version may include an upgrade to a version requiring an additional fee after the effective date of this Agreement.
B. FEES
- (a) Initial KIDOLINK Software License Fee. Franchisee must pay to Franchisor $3,000 for Franchisee's first Franchised Business and $1,000 for Franchisee's second or greater Franchised Business as a one-time Initial Software License Fee, due on the execution of this Agreement (unless), for the use of the KIDOLINK Software.
- (b) Monthly KIDOLINK Software License Fee. Beginning in the first month Franchisee beings to operate the Franchised Business, Franchisee must pay to Franchisor a continuing Monthly Software License Fee via automatic bank draft for the right to use the KIDOLINK Software. Currently, the continuing Monthly Sof
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, a franchisee is generally required to pay an initial software license fee. For the first Kidokinetics franchised business, the franchisee must pay $3,000 for the use of the KIDOLINK Software. This fee is due upon the execution of the Franchise Agreement. However, if the agreement is for a second or greater Kidokinetics franchised business, the initial software license fee is reduced to $1,000, also due upon signing the agreement.
In addition to the initial fee, the franchisee must also pay a continuing monthly software license fee for the right to use the KIDOLINK Software, which is currently $475 per month. Kidokinetics retains the right to increase this monthly fee by up to 10% in any calendar year. The franchisee is obligated to pay this monthly fee via automatic bank draft starting from the first month of operating the franchised business.
Furthermore, Kidokinetics franchisees may be required to pay future initial license fees for any customized software developed by Kidokinetics. They may also be required to pay recurring software fees in connection with the future license of any customized software. These fees would be the then-current amount charged to franchisees for the customized software. Franchisees are also responsible for engaging the services of professional consultants to assist with the training, implementation, or deployment of hardware, software, or other technology as required or suggested by Kidokinetics.