Kid to Kid

The transfer fee of $25,000 is above the typical range for this franchise type—can you explain the rationale for this higher fee and whether it is fully refundable if the transfer is denied?

The ad fund rate of 0.5% is significantly below industry norms for retail franchises; how is the national marketing budget determined and allocated, and what specific campaigns has it funded in the past year?

What circumstances led to the 1 litigation case initiated against the franchisor in the 3-year period, and has it been fully resolved?

Unit closures increased from 1 in 2022 to 3 in 2024—what were the reasons for each closure, and did any involve franchisor intervention or guidance?

Given that the termination rate is 0.0%, does the franchisor actively counsel underperforming franchisees toward voluntary exit, or do underperforming units typically remain open indefinitely?

The 3-year turnover rate of 5.3% is below the typical range; does this reflect strong franchisee retention or limited historical data collection?

What specific inventory requirements (referenced as '13 items per square foot') are mandatory, how are they monitored, and what are the penalties for non-compliance?

Can you provide specific details on the 1 litigation case—the parties involved, claims alleged, and settlement terms if applicable?

The renewal fee of $6,250 represents 25% of the current franchise fee; will the franchise fee increase before my first renewal, and if so, will the renewal fee adjust accordingly?

What mandatory renovations and painting are required at renewal, and what is the typical cost franchisees should budget for renewal compliance?

Territory is protected but not exclusive—under what circumstances could the franchisor open competing Kid to Kid locations within or adjacent to my territory?

The binding arbitration clause requires disputes to be resolved in the county where franchisor headquarters is located; what is the typical cost and timeline for arbitration disputes, and are there any published decisions available to review?

Personal guarantees are required from both franchisee and spouse/domestic partner—are there any circumstances under which this requirement can be waived or reduced?

Late payment penalties include a $200 base fee plus 1.5% monthly interest; at what point in the payment cycle do these penalties apply (e.g., 1 day late, 10 days late)?

How many franchisees are currently subject to local advertising cooperative participation, and what is the typical annual spend required?

Item 19 financial performance data is included; can you clarify whether the reported median and average gross sales figures ($867,805 and $938,483) represent revenues before or after cost of goods sold?

What percentage of franchisees renewed their agreements at the end of their initial 10-year term, and what were the stated reasons for non-renewals?

The system has grown from 108 units 3 years ago to 119 currently; how many of these new units came from ground-up franchises versus acquired/converted locations, and what is the target system size?

What specific curable defaults carry the 14-day cure period, and are there examples of franchisees who successfully cured defaults versus those terminated?