Updated April 1, 2019

If you are considering a Kidcreate Studio franchise, don’t get blindsided by these 25 important franchise fees (from the initial franchise fee, to the royalty fee, to 23 other fees found in Items 5 and 6 of Kidcreate Studio’s 2018 FDD).

1.  Initial Franchise Fee:  $39,000 to $85,000

• Kidcreate Studio offers three different Franchise packages depending on the number of Kidcreate Studio Businesses you wish to purchase:

• Single Franchise (1 Kidcreate Studio Business):  $39,000
• Standard 2 Franchise (up to 2 Kidcreate Studio Businesses):  $65,000
• Standard 3 Franchise (up to 3 Kidcreate Studio Businesses):  $85,000

• You must pay Kidcreate Studio the full Initial Franchise Fee when you sign the Franchise Agreement.

• The standard Kidcreate Studio Franchise includes a protected territory (“Territory”) that, as a general rule, contains between 35,000 and 45,000 households.

• The Initial Franchise Fee is uniform, earned by Kidcreate Studio when paid, and is not refundable.

2.  Launch Fee:  $13,500 for the first Kidcreate Studio Franchise that you purchase, and $5,000 for each additional Kidcreate Studio Franchise that you purchase

• In addition to the Initial Franchise Fee, you must pay Kidcreate Studio a “Launch Fee” of $13,500 for the first Kidcreate Studio Franchise that you purchase, and $5,000 for each additional Kidcreate Studio Franchise that you purchase.

• The Launch Fee offsets the costs in supporting your efforts to find, develop, and open the Studio. The Launch Fee is uniform, non-refundable, and due when you sign the Franchise Agreement.

• If you purchase a Standard Franchise package, you will pay the Launch Fee for the additional Kidcreate Studio Businesses when you sign each Kidcreate Studio Rider.

3.  Opening Extension Fee:  $1,000 per month until the Kidcreate Studio Business is open

• If you fail to open the initial Kidcreate Studio Business within 12 months of signing the Franchise Agreement, or you fail to open any additional Kidcreate Studio Business within 12 months of signing the Kidcreate Studio Rider applicable thereto, you will be required to pay Kidcreate Studio an “Opening Extension Fee” of $1,000 per month until either the Kidcreate Studio Business is open or Kidcreate Studio terminates the Franchise Agreement.

• The Opening Extension Fee is non-refundable.

4.  Opening Inventory:  $500 to $2,000

• You must purchase certain branded opening supplies and inventory items from Kidcreate Studio prior to opening your Studio. Kidcreate Studio estimates that your costs for these items will range from $500 to $2,000.

• These payments are uniform and non-refundable.

5.  Implementation Fees:  $500 for your CR Software and $1,500 for your DB Software

• Prior to opening your Studio, you must purchase a license for database management software (“DB Software”) from third parties Kidcreate Studio designates.

• Prior to opening your Studio, you must also pay Kidcreate Studio the following implementation fees for it to implement the DB Software and class registration software (“CR Software”) for you: 1) $500 for your CR Software; and 2) $1,500 for your DB Software.

• These fees are payable for each Kidcreate Studio Business you have the right to open, are payable upon execution of the Franchise Agreement, and are non-refundable.

6.  Royalty:  8% of Gross Sales

• Due Date:  Within 5 days after the end of the calendar month.

• You must pay your “Royalty” via electronic funds transfer (“EFT”), or such other manner Kidcreate Studio may prescribe.

7.  Brand Fund Contribution:  2% of Gross Sales

• Due Date:  Same as Royalty.

• This contribution will be used for a system-wide “Brand Fund” Kidcreate Studio may establish for its use in promoting and building the Kidcreate Studio brand.

8.  Local Advertising Payment:  the difference between the amount you spent on local advertising each month and your required local advertising expenditure (the greater of: (a) $500 per Kidcreate Studio Business; and (b) 3% of your Gross Sales during the previous calendar month)

• Due Date:  Payable after receipt of invoice.

• If you fail to meet your required local advertising requirement on local advertising, you must pay Kidcreate Studio the difference between the amount you spent and the required advertising expenditure, which will be contributed to the Brand Fund.

9.  Local and Regional Advertising Cooperatives:  2% of Gross Sales

• Due Date:  Within 5 days after the end of the calendar month (or as Kidcreate Studio designates).

• Kidcreate Studio currently does not have a cooperative, but reserves the right to require one to be established in the future.

10.  Insurance:  reimbursement of Kidcreate Studio’s costs, plus a 20% administration charge

• Due Date:  On demand.

• If you fail to obtain insurance, Kidcreate Studio may obtain insurance for you, and you must reimburse it for the cost of insurance obtained, plus 20% of the premium as an administrative cost of obtaining the insurance.

11.  Additional Training or Assistance:  then-current fee (currently $500 per person per day), plus travel and living expenses

• Due Date:  As incurred.

• Kidcreate Studio provides an initial training program at no cost for each Kidcreate Studio Business you open for up to two people (provided they attend at the same time), as well as up to 4 days of on-site assistance before grand opening.

• Kidcreate Studio also provides an additional two days of on-site training that will occur approximately six months after opening.

• Kidcreate Studio may charge you for training additional persons, newly-hired personnel, refresher training courses, advanced training courses, and additional or special assistance or training you need or request and the fee amount will depend on the training required.

• You will be responsible for all travel and living expenses incurred by you or your representatives, or Kidcreate Studio’s representatives for any training.

12.  Technology Fee:  then-current charge (currently $500 per month) for the first Kidcreate Studio Business and the discounted rate for each additional Kidcreate Studio Business (currently $300 per month per additional Kidcreate Studio)

• Due Date:  Same as Royalty.

• For use of Kidcreate Studio’s online systems, website, applications, e-mail, data sharing, integration and maintenance of DB software, CR software, learning management software, search engine optimization for lead generation, and other Internet-related functions.

• Kidcreate Studio reserves the right to increase or decrease this fee in the event it offers updated or additional software or technology for use in the Kidcreate Studio Franchise.

13.  Mystery Shopper Fee:  will vary under circumstances, but Kidcreate Studio estimates the cost of such inspections will not exceed $200 per inspection

• Due Date:  As incurred.

• You must reimburse Kidcreate Studio for its costs and expenses associated with the inspections of third-party mystery shoppers who will pose as normal customers and perform specific tasks (such as attend lessons, ask questions, or seek customer service), and evaluate the services received at your Kidcreate Studio Business.

14.  Convention Fee:  $2,000 for up to 2 attendees (of which $500 is credited back if at least 1 person attends), plus expenses; and $500 for each additional attendee, plus expenses

• Due Date:  As incurred.

• The “Convention Fee” is payable to Kidcreate Studio to help defray the cost of your attendance at the convention(s). Kidcreate Studio reserves the right to charge this fee whether or not you attend the conference.

• If you purchase more than one Kidcreate Studio Business, you are required to send up to two attendees total, but may send more attendees if you pay the additional convention fee for additional attendees.

15.  Supplier and Product Evaluation Fee:  then-current new product/supplier application fee, plus costs of inspection (estimated to be approximately $100 to $500)

• Due Date:  As incurred.

• Payable if Kidcreate Studio inspects a new product, service, or proposed supplier nominated by you.

16.  Interest:  lesser of the daily equivalent of 1.5% per month, or highest amount allowed by law

• Due Date:  As incurred.

• Due on all overdue amounts and accruing as of the original due date.

17.  Insufficient Funds Fee:  $100 per occurrence

• Due Date:  As incurred.

• Payable if any check or EFT payment is not successful due to insufficient funds, stop payment, or any similar event.

18.  Audit Expenses:  cost of audit and inspection, any understated amounts, and any related accounting and legal expenses, plus travel expenses and compensation of Kidcreate Studio’s employees

• Due Date:  On demand.

• You will be required to pay this if an audit reveals that you understated Gross Sales by more than 2% or you fail to submit required reports.

19.  Payment Service Fees:  up to 4% of total charge

• Due Date:  As incurred.

• If payment is made to Kidcreate Studio or its affiliates by credit card for any fee required, Kidcreate Studio may charge a service charge of up to 4% of the total charge.

20.  Indemnification:  will vary under circumstances

• Due Date:  As incurred.

• You must indemnify and reimburse Kidcreate Studio for any expenses or losses that it or its representatives incur related in any way to your Kidcreate Studio Business or Franchise.

21.  Professional Fees and Expenses:  will vary under circumstances

• Due Date:  As incurred.

• You must reimburse Kidcreate Studio for any legal or accounting fees that it incurs as a result of any breach or termination of your Franchise Agreement. You must reimburse Kidcreate Studio if it is required to incur any expenses in enforcing its rights against you under the Franchise Agreement.

22.  Successor Franchise Fee:  10% of then-current Initial Franchise Fee per Kidcreate Studio Business

• Due Date:  At the time you sign the successor Franchise Agreement.

• This fee is commonly referred to as a “renewal fee.” Payable if you qualify for a successor Franchise and choose to enter into a successor Franchise Agreement or applicable Kidcreate Studio Rider.

23.  Transfer Fee:  50% of then-current Initial Franchise Fee per Kidcreate Studio Business, plus cost of training

• Due Date:  $1,000 non-refundable deposit at time of transfer application submittal and remaining balance prior to transfer.

• Payable only in connection with the transfer of each of your Kidcreate Studio Businesses, a transfer of ownership of your legal entity, or the Franchise Agreement.

24.  Liquidated Damages:  will vary under the circumstances

• Due Date:  Within 15 days after termination of the Franchise Agreement.

• Due only if Kidcreate Studio terminates the Franchise Agreement before the end of the term because of your material breach, or you terminate the Franchise Agreement without legal cause.

25.  Broker Fees:  the cost of the brokerage commissions, finder’s fees, or similar charges

• Due Date:  As incurred.

• Payable only in connection with the transfer to a purchaser that was referred to you through a broker that is not an affiliate of Kidcreate Studio.