Can Kidokinetics use the Brand Development Fund for preparing and distributing financial accountings of the Brand Development Fund?
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' 2024 Franchise Disclosure Document, Kidokinetics has complete discretion on how the Brand Development Fund is utilized. The Brand Development 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, Kidokinetics may use the Brand Development Fund for preparing and distributing financial accountings of the Brand Development Fund. This means that a portion of the 2% of weekly gross sales that franchisees contribute to the fund may be used to cover the costs associated with managing and reporting on the fund's finances.
This is a fairly standard practice in franchising, as the franchisor typically manages the brand development fund and incurs administrative costs. While franchisees contribute to the fund, Kidokinetics ultimately decides how the money is spent, including covering the expenses of financial accounting and fund management. Franchisees should be aware that these administrative costs will be deducted from the total fund before the remaining balance is used for marketing and promotional activities.