Under what condition are all initial fees and payments owed by Kidokinetics franchisees deferred?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
to state: Based upon the franchisor's financial condition, the Maryland Securities Commissioner has required a financial assurance.
Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all initial payments by franchisees that purchase multiple franchises shall be deferred until the first franchise opens.
FRANCHISOR: KIDOKINETICS FRANCHISE LLC Entity name (if any) _ Date:
MICHIGAN
THE STATE OF MICHIGAN PROHIBITS CERTAIN UNFAIR PROVISIONS THAT ARE SOMETIMES IN FRANCHISE DOCUMENTS. IF ANY OF THE FOLLOWING PROVISIONS ARE IN THESE FRANCHISE DOCUMENTS, THE PROVISIONS ARE VOID AND CANNOT BE ENFORCED AGAINST YOU.
Each of the following provisions is void and unenforceable if contained in any documents relating to a franchise:
- (a) A prohibition on your right to join an association of franchisees.
- (b) A requirement that you assent to a release, assignment, novation, waiver, or estoppel which deprives you of rights and protections provided in this act. This shall not preclude you, after entering into a Franchise Agreement, from settling any and all claims.
- (c) A provision that permits us to terminate a Franchise prior to the expiration of its term except for good cause. Good cause shall include your failure to comply with any lawful provision of the Franchise Agreement and to cure such failure after being given written notice thereof and a reasonable opportunity, which in no event need be more than 30 days, to cure such failure.
- (d) A provision that permits us to refuse to renew your Franchise without fairly compensating you by repurchase or other means for the fair market value at the time of expiration of your inventory, supplies, equipment, fixtures, and furnishings.
Source: Item 23 — RECEIPT (FDD pages 59–205)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the deferral of initial fees and payments depends on the state where the franchise is located. For all franchisees, initial fees and payments are deferred until Kidokinetics completes its pre-opening obligations under the franchise agreement. Additionally, for franchisees purchasing multiple franchises, all initial payments are deferred until the first franchise opens. However, some states have additional requirements for fee deferral.
In Illinois, due to Kidokinetics's financial condition, payment of all initial fees, including the Franchise Fee, is deferred until after all of Kidokinetics's initial obligations are complete and the Franchise is open for business.
In Virginia, the Virginia State Corporation Commission's Division of Securities and Retail Franchising requires Kidokinetics to defer payment of the initial franchise fee and other initial payments until Kidokinetics has completed its pre-opening obligations.
In Minnesota and California, payment of the Initial Franchise Fee is deferred until Kidokinetics has satisfied its pre-opening obligations to the Franchisee and the Franchisee has commenced doing business.