Can Kidokinetics use the Brand Development Fund for brand development?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
We have complete discretion on how the Brand Development Fund will be utilized. We may use the Brand Development Fund for local, regional, or national marketing, or any expenditure that we, in our sole discretion, deem necessary or appropriate to promote or improve the System or the Kidokinetics brand. For example, we may use the Brand Development Fund for: (i) developing, maintaining, administering, directing, preparing or reviewing advertising and marketing materials, promotions and programs, including social media management; (ii) public awareness of any of the Marks; (iii) public and consumer relations and publicity; (iv) brand development; (v) research and development of technology, products and services; (vi) website development (including social media) and search engine optimization; (vii) development and implementation of quality control programs; (viii) conducting market research; (ix) changes and improvements to the System; (x) the fees and expenses of any advertising agency we engage to assist in producing or conducting advertising or marketing efforts; (xi) collecting and accounting for Brand Development Fund Contributions; (xii) preparing and distributing financial accountings of the Brand Development Fund; (xiii) conducting quality assurance programs and other reputation management functions; and (xiv) our and our affiliates' expenses associated with direct or indirect labor, administrative, overhead, or other expenses incurred in relation to any of these activities. We may use national and/or regional advertising agencies as the source for our advertising materials, or we may prepare them in-house.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 26–34)
What This Means (2024 FDD)
According to Kidokinetics's 2024 Franchise Disclosure Document, the Brand Development Fund can be used for brand development. Kidokinetics has complete discretion regarding how the Brand Development Fund is utilized. The fund can be used for local, regional, or national marketing, or any expenditure that Kidokinetics deems necessary or appropriate to promote or improve the Kidokinetics system or brand.
Specifically, the FDD states that the Brand Development Fund may be used for brand development, as well as for developing and maintaining advertising and marketing materials, increasing public awareness of the Kidokinetics marks, public and consumer relations, research and development of technology, website development, quality control programs, market research, and improvements to the Kidokinetics system. The fund can also cover the fees and expenses of advertising agencies, the collection and accounting of Brand Development Fund contributions, the preparation and distribution of financial accountings, quality assurance programs, and the franchisor's expenses related to these activities.
Kidokinetics does not guarantee that advertising expenditures from the Brand Development Fund will directly benefit any franchisee on a pro rata basis, or at all. Franchisees are required to pay 2% of their weekly gross sales to the Brand Development Fund. The Brand Development Fund is not audited, but Kidokinetics will provide an annual accounting of how the fund's proceeds have been spent in the previous year upon written request. During the fiscal year ended December 31, 2023, 100% of the Brand Development Fund Contributions were spent on administration.