ITEM 1
THE FRANCHISOR, ITS PARENTS,
PREDECESSORS AND AFFILIATES
The Franchisor is Kinderdance
International, Inc. and is referred to in this Disclosure Document as "we," "us,"
or "our."
"You" means a person who buys a franchise from us. If you are a corporation,
partnership or other entity, certain provisions of our Franchise Agreement also
will apply to your owners. This Disclosure Document indicates when your owners
also are covered by a particular provision.
We are an Arizona corporation, incorporated on April 15, 1982. Our principal business address is 1333 Gateway Dr. Suite 1003, Melbourne, Florida 32901. Our agent in this state for service of
process is disclosed in Exhibit F. We conduct business under our corporate name, under the
name "Kinderdance
International" and under the service mark "Kinderdance."
Our Franchise
Program.
We grant franchises for the
operation of children''s dance education businesses ("Kinderdance
Businesses") that use our primary service marks: "KINDERDANCE," and "KINDERGYM" (the "Marks") in a specified geographic
Territory (the "Territory"). Kinderdance Businesses operate under distinctive
business formats, systems, methods, procedures, designs and specifications, all
of which we may improve, further develop or otherwise modify from time to time
(collectively, the "Kinderdance System"). Kinderdance Businesses work
exclusively with the 5 Kinderdance Programs: KINDERDANCE, K1NDERCOMBO,
KINDER-GYM, K1NDERMOTION and KINDER-TOTS. We grant franchises for Kinderdance
Businesses in accordance with our franchise agreement. A copy of it is attached
as Exhibit B.
Our leading program, the
KINDERDANCE Program, was designed and developed for three to five year old
children based on sound principle, theories, knowledge, and research findings
in the field of early childhood education and dance. The primary goal of the
KINDERDANCE Program is for each child to acquire a love for learning while feeling
comfortable and confident with their individual movement potential and
personality. The KINDERDANCE Program is an "Education Through Dance"
program concerned with the total development of the child, including the
perceptual motor, psychomotor, and affective domains. Preschoolers are taught
the basics of Ballet, Tap, Acrobatics and Creative Dance, which are blended
with numbers, colors, shapes and words. The three-year developmental program is
designed to meet the needs of Daycare Centers, Nursery Schools and numerous
other diversified locations.
The KINDERCOMBO Program was
designed to meet the needs of the older child, six to eight years old, whose
attention span and motor abilities are more refined. A combination beginning
Ballet and Tap class is the foundation of this program, stressing poise, grace,
balance, flexibility, strength, rhythm and knowledge of terminology developed
through center and cross floor work, and sequencing of patterns in dance.
The KINDERGYM Program was
designed to meet the needs of three to five year old children desiring more
emphasis in general movement, motor development, gymnastics and fitness blended
with colors, numbers, shapes and words.
The KFNDERTOT Program is a
Pre-Kinderdance Program for two year olds, designed to develop motor skills,
movement creativity, body awareness, Pre-Ballet, Tap and Acrobatics readiness
skills which are blended with colors, numbers and shapes. It is taught with age
appropriate music and songs.
The KINDERMOTION Program is a
fitness program for 3-12 year old children. It is developmental^ designed to
encourage a love of physical activity by developing motor skills. Using imagery
and age appropriate movement education the program stresses overall fitness and
good nutrition habits which prepares students minds and bodies for athletic and
academic pursuits.
Collectively, we refer to the
KINDERDANCE, KINDER-COMBO, KINDER-GYM, KINDERMOTION and KINDER-TOT programs as
the "Kinderdance
Programs." Kinderdance Businesses generally teach the Kinderdance Programs at Child
Care centers, pre-schools, public and private schools, YMCA''s, military bases,
and numerous other diversified locations.
You are not required to
maintain an office or studio to operate your Kinderdance Business, but you must
operate your Kinderdance Business according to our business formats, methods,
procedures, designs, layouts, standards and specifications.
We offer Bronze, Silver and
Gold franchises. Bronze Level franchises restrict you to teaching at a maximum
of 10 locations and do not allow you to hire and train teachers. Silver
franchises restrict you to teaching at a maximum of 20 locations in your
Territory. Gold franchises allow you to teach Kinderdance Programs at an
unlimited number of locations in your Territory. Also, we grant exclusive
operating territories to Gold franchise owners. We charge a lower initial
franchise fee for a Bronze Level franchise but charge a higher royalty. We
charge a higher initial franchise fee for Gold franchises but also a lower
royalty. Gold Franchise Owners can choose to meet their sales quotas on their
own or through marketing other franchises in their Territory as an "Area
Representative". Gold Franchise Owners who choose this option help us
solicit prospective franchisees, help train them and provide continuing support
to them. In exchange for these services, we compensate them with additional
territory, a portion of the initial franchise fees and royalties from the
franchisees that they have solicited and provide services to. See Items 5 and
6. Exhibit B,
Schedule 6 is a copy of our form of
"Bronze Addendum" which modifies our Franchise Agreement for our
Bronze Level program. Exhibit B, Schedule 7 is a copy of our Conversion Addendum. Exhibit B, Schedule 5 is a copy of our standard form
of "Gold Addendum" which modifies the Franchise Agreement for our
Gold program. See Item 5.
Our Business.
We have been offering
franchises for Kinderdance Businesses since February 1, 1985. We conducted a
Kinderdance Business ourselves since our incorporation on April 15, 1982 until
1985. We then sold it to a franchisee. We do not engage in other business activities
and have not offered franchises in other lines of business. We have no
affiliates, parents, or predecessors.
Comnetition.
You will be competing with
other young children''s dance, motor development, gymnastics and fitness
educational programs. Competitors may include public and private schools,
YMCA''s, dance academies, gymnastic programs and schools, churches and other
providers of physical education for children. Your products and services will
be offered to children in the general public. The market for children''s dance
education programs is developed in some areas and developing in other areas,
depending on the existing programs in the particular area.
We are not aware of any
federal, state or local laws, regulations or ordinances that specifically
relate to the operation of Kinderdance Businesses, other than those affecting
businesses generally. Most of the sites in which you will teach will be daycare
centers or educational institutions that may have to comply with various
federal, state and local laws, rules and regulations. However, those laws,
rules and regulations should not affect your operation and we are not aware of
any special licensing required to operate your Kinderdance Business at those
locations.
Nevertheless, we are aware of
at least one instance in which a local California regulator took the position
that the instructors for Kinderdance Businesses needed to comply with various
requirements of the California health and safety code for licensees of child
daycare centers. We were able to resolve the matter without the need for any
special licensing. It is possible that other California regulators, as well as
regulators of other states, may take similar positions.
State pre-kindergarten programs
have grown dramatically in the last two decades, and much more attention is
being paid to the school readiness of children. In 1980, there were only 10
state programs; now at least 38 states and the District of Columbia have one or
more pre-kindergarten initiatives. By one estimate, these programs serve about
740,000 children, at a cost of over $2.5 billion in state funds. Most state
programs are part-day, part-year and targeted to a limited number of four-year
olds based on family income or other risk factors for school success. Six
states- Georgia, New Jersey, New York, Oklahoma, West Virginia and Wisconsin- have policies in place or a goal to move toward universal access to pre-kindergarten, and
other state leaders are contemplating universal access as well.
In delivering their pre-kindergarten programs, states
are taking one of two principal approaches. States are choosing to:
1.
Offer
pre-kindergarten programs exclusively in public schools or
2.
Offer
pre-kindergarten programs in schools and other settings including private child
care centers and/or community-based child care.
In those states that offer State funded
pre-kindergarten programs you may be required to adjust your class times so as
not to interfere with the State funded class schedule and a portion of your age
appropriate children may be available only in Public school after school
programs or in off-site locations other than child care centers.
A complete report
on this subject is available on the internet at www.clasp.org .
There are several private music
licensing companies that may require Kinderdance Franchisees to pay a licensing
fee in order to use music for which the licensing companies have licensing
authorization. The basic Kinderdance original music is exempt from these fees.
College
Support Program
This is an optional program that allows you to expand
your business operations so that your child can work for you by offering
KINDERDANCE programs in the geographic area where she is attending college at
no additional fee. (See the College Support Program addendum to the Franchise
Agreement).
Conversion
