Engineering_For_Kids 2025 Franchise FAQ - FDD Ninja

Question 1

In 2023, how many Engineering For Kids outlets opened across all states?

Accepted Answer

| State          | Year | Outlets at Start of Year | Outlets Opened | Termi nations | Non Renewals | Re acquired by Fran chisor | Ceased Operations Other Reasons | Outlets at End of the Year |
|----------------|------|--------------------------------|-------------------|------------------|-----------------|-------------------------------------|------------------------------------------|-------------------------------------|
|  | 2022 | 2 | 0 | 0 | 0 0 |  | 0 | 2 |
| New York | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| North Carolina | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2022 | 1 | 0 | 0 | 0 | 0 | 1 | 0 |
| Ohio | 2023 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Oregon | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Pennsylvania | 2023 | 1 | 0 | 0 | 1 | 0 | 0 | 0 |
|  | 2024 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
|  | 2022 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
| Tennessee | 2023 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2022 | 5 | 0 | 0 | 1 | 0 | 0 | 4 |
| Texas | 2023 | 4 | 1 | 0 | 2 | 0 | 0 | 3 |
|  | 2024 | 3 | 2 | 0 | 0 | 0 | 0 | 5 |
|  | 2022 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
| Virginia | 2023 | 2 | 0 | 0 | 0 | 0 | 0 | 2 |
|  | 2024 | 2 | 0 | 0 | 1 | 0 | 0 | 1 |
|  | 2022 | 1 | 1 | 0 | 0 | 0 | 0 | 2 |
| Wisconsin | 2023 | 2 | 0 | 0 | 1 | 0 | 0 | 1 |
|  | 2024 | 1 | 0 | 0 | 0 | 0 | 0 | 1 |
|  | 2022 | 29 | 1 | 0 | 3 | 0 | 1 | 26 |
| Total | 2023 | 26 | 1 | 0 | 4 | 0 | 0 | 23 |
|  | 2024 | 23 | 3 | 0 | 1 | 0 | 2 | 23 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–52)

Question 2

Besides establishing Engineering For Kids businesses outside my territory, what other rights does Engineering For Kids reserve?

Accepted Answer

- **1.3.2.** We and our affiliates reserve all rights not expressly granted to you under this Agreement, and therefore we have the right, among other things, to:
  - (a) Establish, and license others to establish and operate, Engineering For Kids Businesses at any location outside the Territory, notwithstanding their proximity to the Territory or Franchised Business or their actual or threatened impact on sales at your Franchised Business;
  - (b) Establish, and license others to establish and operate, businesses and programs under other systems or other proprietary marks, which businesses or programs may offer or sell services and products that are the same as, similar to, or different from the Programs offered

from the Franchised Business, and which businesses or programs may be located inside or outside the Territory, notwithstanding such business' or programs' proximity to the Territory or Franchised Business or their actual or threatened impact on sales at your Franchised Business;
- (c) Establish, and license others to establish, Engineering For Kids Businesses at any Large Accounts (as that term is defined below) inside or outside the Territory, notwithstanding such Engineering For Kids Business' proximity to the Territory or Franchised Business or their actual or threatened impact on sales at your Franchised Business;
- (d) Acquire and operate any business or program of any kind, whether located inside or outside the Territory notwithstanding such business' or program's proximity to the Territory or Franchised Business or its actual or threatened impact on sales at your Franchised Business, so long as any such business is not an Engineering For Kids Businesses operated from a location inside the Territory;
- (e) Provide and conduct Special Event Services to customers located within the Territory, including customers who attend Programs of your Franchised Business, if you do not offer or otherwise exercise your right to provide Special Event Services; and
- (f) Sell products and services using the Proprietary Marks or otherwise through alternative distribution channels, including e-commerce, at any location, including inside or outside the Territory. We will not, however, sell or license directly to schools located in your Territory the curriculum, which we license to Engineering For Kids Businesses as part of the Proprietary Materials for franchisees' use in conducting the Programs, for the purpose of allowing such schools to use that curriculum to conduct the Programs directly with their students in the schools.
- **1.3.3. Large Accounts.** The term "**Large Account**" means any location from which Programs may be conducted that have multiple affiliated outlets (such as a chain of children's afterschool care centers, or preschools), that we designate based upon our determination that these businesses in multiple locations are deemed of strategic importance to us. We will have the right to negotiate the terms and conditions of all Programs to be conducted at Large Accounts, in accordance with the terms of Section 6.9 below.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 3

What is the total estimated initial investment range (excluding real estate costs) for an Engineering For Kids franchise?

Accepted Answer

STMENT**

#### **YOUR ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure           | Amount              | Method of Payment | When Due                             | To Whom Payment Is To Be Made |
|-------------------------------|---------------------|----------------------|--------------------------------------|-------------------------------------|
| Initial Franchise Fee (1) | \$30,000 | Lump Sum | On signing Franchise Agreement | Us |
| Rent (2) | \$7,500 - \$15,000 | As agreed | As incurred | Landlord |
| On-site Location Review (3) | \$0 - \$500 | Lump sum | As incurred | Us |
| Leasehold Improvements | \$10,000 - \$50,000 | As Agreed | As Agreed | Outside |
| (4) |  |  |  | Suppliers |
| Type of Expenditure                                                               | Amount              | Method of Payment           | When Due                    | To Whom Payment Is To Be Made     |
|-----------------------------------------------------------------------------------|---------------------|--------------------------------|-----------------------------|-----------------------------------------|
| Furniture, Fixtures, and | \$5,000 - \$7,500 | As Agreed | As Agreed | Outside |
| Equipment (5) |  |  |  | Suppliers |
| Office Equipment and | \$1,150 - \$3,700 | As Agreed | As Agreed | Outside |
| Supplies (6) |  |  |  | Suppliers |
| Opening Inventory and Supplies (7) | \$5,000 - \$9,000 | As Agreed | As Incurred | Designated and Approved Suppliers |
| Classroom Laptop | \$3,000 -\$6,000 - | As Agreed | As Incurred | Outside |
| Computers (8) |  |  |  | Suppliers |
| Initial Marketing Campaign | \$2,500 Minimum | As Agreed | As Agreed | Advertising |
| (9) |  |  |  | Sources |
| Training Expenses (10) | \$900 - \$1,500 | As Incurred | As Incurred | Third Parties |
| Insurance – 3 months (11) | \$500 - \$750 | As Agreed | As Agreed | Insurance Company |
| Business Licenses (12) | \$50 - \$200 | As Incurred | As Incurred | Government agencies |
| Professional Fees (13) | \$1,000 - \$2,000 | As Incurred | As Incurred | Third Parties |
| Utility Deposits | \$0 - \$500 | As Incurred | As Incurred | Third Parties |
| Technology Fee – 3 months | \$600 | Electronic Fund Transfer | By 5th day of each month | Us |
| Additional Funds – 3 | \$4,000 - \$10,000 | As Incurred | As Incurred | Employees, |
| months (14) |  |  |  | Third Parties |
| TOTAL ESTIMATED | \$71,200 -\$139,750 |  |  |  |
| INITIAL INVESTMENT |  |  |  |  |
| (excluding real est

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 15–19)

Question 4

What is the total number of classroom training hours provided remotely by Engineering For Kids?

Accepted Answer

.0 | Remote Training |
| Total | 15.0 | 0.0 |  |## **POST TRAINING PROGRAM**

| Subject | Hours of Classroom Training |  | Hours of On-The-Job Training | Location |
|---|---|---|---|---|
| EFK Brand, Marketing | 2.0 | 0.0 |  | Remote Training or as |
| Overview and Sales Training |  |  |  | designated |
| Initial Marketing Campaign | 3.0 | 0.0 |  | Remote Training or as designated |
| Business Best Practices | 2.5 | 0.0 |  | Remote Training or as designated |
| Computer System/Software | 2.0 | 0.0 |  | Remote Training or as |
| and Technology |  |  |  | designated |
| Customer Service | 1.5 | 0.0 |  | Remote Training or as designated |
| Personnel/ HR | 1.5 | 0.0 |  | Remote Training or as designated |
| Engineering For Kids Curriculum | 7.5 | 0.0 |  | At a host Engineering For Kids program, or Remote Training or as designated |
| Total | 20.0 | 0.0 |  |  |
| Subject | Hours of Classroom Training | Hours of On- The-Job Training | Location |  |
| Learning EFK | 3.0 | 0.0 | Remote Training |  |
| Developing Marketing Strategy | 6.0 | 0.0 | Remote Training |  |Jonathan Hayes is responsible for running our training programs. Jonathan has more than 20 years of experience in the education franchising sector, including franchisee training and development and franchise support. Jonathan is also responsible for the development of numerous processes, manuals and franchisee support resources.

We may use additional staff to assist in training.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)

Question 5

What was the total number of Engineering For Kids outlets at the end of 2023?

Accepted Answer

| State | Year | Outlets at Start of the Year | Outlets Opened | Outlets Re acquired From Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|-------|------|------------------------------------|-------------------|----------------------------------------------|-------------------|----------------------------------|----------------------------------|
|       | 2022 | 0                                  | 0                 | 0                                            | 0                 | 0                                | 0                                |
| Total | 2023 | 0                                  | 0                 | 0                                            | 0                 | 0                                | 0                                |
|       | 2024 | 0                                  | 0                 | 0                                            | 0                 | 0                                | 0                                |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–52)

Question 6

What was the total number of Engineering For Kids outlets at the start of 2022?

Accepted Answer

| State | Year | Outlets at Start of the Year | Outlets Opened | Outlets Re acquired From Franchisee | Outlets Closed | Outlets Sold to Franchisee | Outlets at End of the Year |
|-------|------|------------------------------------|-------------------|----------------------------------------------|-------------------|----------------------------------|----------------------------------|
|       | 2022 | 0                                  | 0                 | 0                                            | 0                 | 0                                | 0                                |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–52)

Question 7

What is the total projected number of new Engineering For Kids franchised outlets expected to open in the next fiscal year across Florida and Texas?

Accepted Answer

| State   | Franchise Agreements Signed But Outlets Not Opened | Projected New Franchised Outlets in the Next Fiscal Year | Projected New Company Owned Outlets in the Next Fiscal Year |
|---------|----------------------------------------------------------|----------------------------------------------------------------|-------------------------------------------------------------------|
| Florida | 0                                                        | 5                                                              | 0                                                                 |
| Texas   | 0                                                        | 5                                                              | 0                                                                 |
| Total   | 0                                                        | 10                                                             | 0                                                                 |

Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 48–52)

Question 8

What was the difference in total assets for Engineering For Kids between 2023 and 2024?

Accepted Answer

|  | 2024 | 2023 | 2022 |  |
|---|---|---|---|---|
| REVENUE |  |  |  |  |
| Royalty fees |  | $         2  35,010 | $         2  64,890 | $         2  33,947 |
| Brand fees | 44,888 | 52,752 | 4  9,183 |  |
| Technology fees | 38,300 | 37,500 | 42,200 |  |
| Franchise fees | 90,250 | 34,000 | 51,500 |  |
| Late fees | 10,114 | 2,875 | 1,925 |  |
|  | TOTAL REVENUE | 418,562 | 392,017 | 378,755 |
| OPERATING EXPENSES |  |  |  |  |
| Royalty and overhead | 83,700 | 78,400 | 3  6,000 |  |
| Salaries and wages | 87,156 | 69,961 | 6  4,974 |  |
| Marketing and advertising | 15,397 | 53,981 | 7  2,488 |  |
| Franchisor marketing expense | 51,070 | 46,511 | 3  3,266 |  |
| Office | 44,342 | 32,211 | 2  1,614 |  |
| Consulting fees | 21,426 | 29,607 | 2  9,870 |  |
| Professional and legal fees | 51,589 | 20,265 | 4  0,483 |  |
| Travel | 9,801 | 12,349 | 6  ,622 |  |
| Credit loss expense | 1,740 | 6,953 | 1  0,739 |  |
| Bank charges | 4,685 | 2,405 | 2  ,037 |  |
| Amortization | 10,437 | - | 2  ,235 |  |
|  | TOTAL OPERATING EXPENSES | 381,343 | 352,643 | 320,328 |
|  | Income from operations | 3  7,219 | 3  9,374 | 5  8,427 |
| OTHER INCOME |  |  |  |  |
| Foreign exchange gain (loss) |  | - | ( 4,441) | ( 2,167) |
| NET INCOME |  | $            3  7,219 | $            3  4,933 | $            5  6,260 |

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 9

What are all the fees that an Engineering For Kids franchisee might have to pay, considering both the initial fees in Item 5 and the other fees listed in Item 6?

Accepted Answer

AL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently \$30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us \$225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

*Veteran's discount* – As a way to assist honorably discharged veterans of the U.S. Armed Forces in becoming a franchised business owner, we will reduce the Initial Franchise Fee for a standard Territory by 10% for qualifying veterans who enter into a Franchise Agreement with us.

*Existing Franchisee discount* – We also want to encourage our existing franchisees in good standing to develop additional Franchised Business. To do so, our current policy is that we will reduce the Initial Franchise Fee by 10% for our franchisees who are in good standing, have been in operation for at least one year, and who enter into an additional Franchise Agreement with us. We may discontinue or alter this policy in the future.

#### Training Fee (for more than 2 trainees)

We will provide initial training and training materials for up to two trainees at no additional charge to you. If you send more than two people to initial training, we will charge you a \$300 per day training fee for each additional person. Training fees are due to us before you begin initial

training, and are uniform and non-refundable. You will be responsible for your trainees' travel, meal and lodging expenses. See Item 11 for more information on training.

## Site Review Fee (if applicable)

As described further in Item 7 and Item 11, you must identify the physical site for your EFK Center Location. We will review your proposals for an EFK Center Location. We are not required to conduct on site evaluations of proposed sites, but we may do so if we deem it advisable. If we conduct a site evaluation, we have the right to charge you for that on-site evaluation, which amount will be our actual costs (but not less than \$500). If applicable, this amount will be payable upon our invoice and will be non-refundable.

These fees are uniformly applied to all new franchisees in the manner described above.

Question 10

Are other Engineering For Kids franchisees subject to Territory Rules similar to those of other franchisees?

Accepted Answer

ne Engineering For Kids Business, and for use in connection with the Virtual Programs.

Other Engineering For Kids Businesses will operate under franchise agreements with restrictions similar to those above (the "**Territory Rules**"), which means that in some instances other Engineering For Kids Businesses may perform services in your Territory or sponsor advertising which reaches persons in your Territory. Although we do not intend to knowingly permit violations of the Territory Rules, we are not required to take action against franchisees for violations of the Territory Rules.

#### Territorial Rights and Rights We Reserve

You will not receive an "exclusive" Territory.

Source: Item 12 — TERRITORY (FDD pages 36–41)

Question 11

How does the Engineering For Kids franchisor's business experience in Item 2 relate to the assistance they provide to franchisees as described in Item 11?

Accepted Answer

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

We are not required by the Franchise Agreement to furnish any other service or assistance to you before the opening of your Franchised Business.

#### Our Obligations After You Begin Operating

During the operation of your Franchised Business.

- 1. We may conduct, as we deem advisable, periodic inspections of the Franchised Business, and may evaluate the services rendered and products sold by your Franchised Business. (Franchise Agreement, Section 6.10)
- 2. We will offer you additional mandatory or optional training programs, if we determine them to be appropriate. We may charge a reasonable training fee for additional training programs, whether mandatory or optional. (Franchise Agreement, Section 5.2)
- 3. We will make available to you information about new developments, techniques, and improvements in the areas of operations, management, and marketing, to the same extent as we make the information available to other Engineering For Kids Business franchisees in good standing. We may provide this information through the distribution of printed or filmed material, an Intranet or other electronic forum, meetings or seminars, individual or group counseling, training programs, telephone communications, or other forms of communications. Limited on-site assistance to you will be permitted if we have resources available. (Franchise Agreement, Section 6.14)
- 4. We will administer the Brand Fund and Regional Fund (if we establish a Regional Fund), as described below in this Item. (Franchise Agreement, Sections 9.1 - 9.4)

Neither the Franchise Agreement nor any other agreement, requires us to provide any other assistance or services to you during the operation of the Franchised Business.

## Training

If this is your first Engineering For Kids Business, you (or the Operating Principal, if you are a corporation or other entity) and any other Designated Employee must attend and successfully complete, to our satisfaction, the initial training program that we offer on operating an Engineering For Kids Business. The training is conducted at designated locations (such as conferenced facilities) or virtually.

Question 12

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the level of assistance they provide to franchisees (Item 11)?

Accepted Answer

The "Engineering for Kids" franchise system was first developed and operated by our predecessor and its affiliate. On October 31, 2020 (the "**Acquisition Date**"), we became the franchisor of the "Engineering for Kids" franchise system through as asset purchase from EK Franchising Company ("**EKFC**") and Engineering for Kids, Inc. ("EFKI"). As of the Acquisition Date, we and our parent, LaunchLife USA, Inc. purchased the assets used in operating the franchise system, including all existing franchise agreements and international master franchise agreements, and the "Engineering for Kids" and related trademarks.

EKFC is a Virginia corporation that was formed on July 27, 2010. EFKI is a Virginia corporation that was formed on February 2, 2009. EKFC and EFKI have their principal place of business at 1320 Central Park Boulevard, Suite 201, Fredericksburg, Virginia 22401. EFKI operated the first Engineering For Kids Business in Stafford, Virginia from 2009 until the Acquisition Date. From September 2011 to the Acquisition Date, EKFC offered franchises for Engineering For Kids Businesses Except as stated, EKFI and EKFC never offered franchises in any line of business or conducted any other business.

Question 13

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the level of commitment they demonstrate to the success and well-being of their franchisees?

Accepted Answer

[Item 1: THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES]

#### Acquisition of the System, Our Predecessor and Background of the System

The "Engineering for Kids" franchise system was first developed and operated by our predecessor and its affiliate. On October 31, 2020 (the "**Acquisition Date**"), we became the franchisor of the "Engineering for Kids" franchise system through as asset purchase from EK Franchising Company ("**EKFC**") and Engineering for Kids, Inc. ("EFKI"). As of the Acquisition Date, we and our parent, LaunchLife USA, Inc. purchased the assets used in operating the franchise system, including all existing franchise agreements and international master franchise agreements, and the "Engineering for Kids" and related trademarks.

EKFC is a Virginia corporation that was formed on July 27, 2010. EFKI is a Virginia corporation that was formed on February 2, 2009. EKFC and EFKI have their principal place of business at 1320 Central Park Boulevard, Suite 201, Fredericksburg, Virginia 22401. EFKI operated the first Engineering For Kids Business in Stafford, Virginia from 2009 until the Acquisition Date. From September 2011 to the Acquisition Date, EKFC offered franchises for Engineering For Kids Businesses Except as stated, EKFI and EKFC never offered franchises in any line of business or conducted any other business.

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

We are not required by the Franchise Agreement to furnish any other service or assistance to you before the opening of your Franchised Business.

#### Our Obligations After You Begin Operating

During the operation of your Franchised Business.

- 1. We may conduct, as we deem advisable, periodic inspections of the Franchised Business, and may evaluate the services rendered and products sold by your Franchised Business. (Franchise Agreement, Section 6.10)
- 2. We will offer you additional mandatory or optional training programs, if we determine them to be appropriate. We may charge a reasonable training fee for additional training programs, whether mandatory or optional. (Franchise Agreement, Section 5.2)
- 3. We will make available to you information about new developments, techniques, and improvements in the areas of operations, management, and marketing, to the same extent as we make the information available to other Engineering For Kids Business franchisees in good standing. We may provide this information through the distribution of printed or filmed material, an Intranet or other electronic forum, meetings or seminars, individual or group counseling, training programs, telephone communications, or other forms of communications. Limited on-site assistance to you will be permitted if we have resources available. (Franchise Agreement, Section 6.14)
- 4. We will administer the Brand Fund and Regional Fund (if we establish a Regional Fund), as described below in this Item. (Franchise Agreement, Sections 9.1 - 9.4)

Neither the Franchise Agreement nor any other agreement, requires us to provide any other assistance or services to you during the operation of the Franchised Business.

[Item 23: RECEIPTS]

#### **14.3.2.** The proposed transferee must complete all of the following requirements:

- **a.** Demonstrate to our satisfaction that he or she meets all of our then-current qualifications to become an Engineering For Kids Business franchisee.
- **b.** Sign our then-current standard form of Franchise Agreement (or the standard form most recently offered to new franchisees, if we are not then offering franchises to new franchisees) for a new initial term. There is no limitation on the extent to which the terms of the new Franchise Agreement may differ from the terms of this Agreement, except that your Territory will remain the same as in this Agreement.
- **c.** Successfully complete our then-current training requirements and pay the then-current fee for training.
- **d.** Make arrangements to modernize, upgrade, and conform the Franchised Business, at the transferee's expense, to our then-current standards and specifications for new Engineering For Kids Businesses.
- **e.** If the proposed transferee is one of our other franchisees, he or she must not be in default under his or her agreements with us and must have a good record of customer service and compliance with our operating standards.

Question 14

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the level of control they exert over the franchisee's operations (Item 8)?

Accepted Answer

Engineering For Kids Businesses provide educational activities, namely, providing seminars, classes, camps, workshops, conferences, and programs in the fields of math, science, technology, and engineering using specified business formats, methods, procedures, designs, layouts, standards, and specifications, items and products that we may designate or approve from time to time ("**Programs**"). The Programs have traditionally been conducted in person.

We own a distinctive set of specifications and operating standards and procedures (collectively, the "**System**") for Engineering For Kids Businesses.

We may conduct, as we deem advisable, periodic inspections of the Franchised Business, and may evaluate the services rendered and products sold by your Franchised Business. (Franchise Agreement, Section 6.10)
- 2. We will offer you additional mandatory or optional training programs, if we determine them to be appropriate. We may charge a reasonable training fee for additional training programs, whether mandatory or optional. (Franchise Agreement, Section 5.2)
- 3. We will make available to you information about new developments, techniques, and improvements in the areas of operations, management, and marketing, to the same extent as we make the information available to other Engineering For Kids Business franchisees in good standing. We may provide this information through the distribution of printed or filmed material, an Intranet or other electronic forum, meetings or seminars, individual or group counseling, training programs, telephone communications, or other forms of communications. Limited on-site assistance to you will be permitted if we have resources available. (Franchise Agreement, Section 6.14)

Question 15

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the level of flexibility they allow franchisees in customizing their programs (Item 8)?

Accepted Answer

You may offer customers only the services and products that we have expressly authorized to be offered by Engineering For Kids Businesses, as periodically specified in the Manual. Currently, the Programs that Engineering For Kids Businesses offer consist of the Core Programs, and we may specify Authorized Products. We have the right to change the authorized services and products, and we may designate specific services or products as optional or mandatory (the Core Programs). We reserve the right to limit the number of ancillary Programs you conduct at the Franchised Business in addition to the Core Programs. There are no limits on our right to do so (although offering educational programs in the fields of math, science, technology, and engineering will remain a core offering). You acknowledge that we may approve some services, products, and other items for certain franchisees and not others based on legitimate business reasons. You must cease selling or offering for sale any services or products that we disapprove or revoke approval of at any time.

Question 16

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the level of innovation and creativity they encourage within the franchise system (Item 8)?

Accepted Answer

you maintain or that are maintained on your behalf.

## Brand Development Council

The Brand Development Council (BDC) is made of up franchisees from all over the EFK network who volunteer their time in an effort to meet goals and initiatives for the betterment of Engineering For Kids. The primary goal of the BDC is to grow the brand through world class student experience and innovative programs. They work to promote and facilitate the growth of the franchise system by elevating best practices, initiating projects based on feedback from franchise owners and working directly with franchisees from the network to accomplish these projects. The council's authority will be advisory only. We will have the right to dissolve or change the franchise advisory council.

#### Computer System

You must buy (or lease) and maintain a computer system. The computer system will consist of certain hardware and software, as well as peripheral devices (such as printers). We have the right to specify the brands, types, makes, and models of your Computer System. You will have to abide by our requirements concerning the Computer System, which currently require running Windows 10 or 11 and certain other hardware and software and related customer registration and payment functions, and merchant and credit card processing gateway services (these will be part of a website interface that customers will use to sign up and pay for classes with your Franchised Business).

Question 17

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the level of support and guidance they provide to franchisees in navigating the challenges of running a business?

Accepted Answer

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

We are not required by the Franchise Agreement to furnish any other service or assistance to you before the opening of your Franchised Business.

#### Our Obligations After You Begin Operating

During the operation of your Franchised Business.

- 1. We may conduct, as we deem advisable, periodic inspections of the Franchised Business, and may evaluate the services rendered and products sold by your Franchised Business. (Franchise Agreement, Section 6.10)
- 2. We will offer you additional mandatory or optional training programs, if we determine them to be appropriate. We may charge a reasonable training fee for additional training programs, whether mandatory or optional. (Franchise Agreement, Section 5.2)
- 3. We will make available to you information about new developments, techniques, and improvements in the areas of operations, management, and marketing, to the same extent as we make the information available to other Engineering For Kids Business franchisees in good standing. We may provide this information through the distribution of printed or filmed material, an Intranet or other electronic forum, meetings or seminars, individual or group counseling, training programs, telephone communications, or other forms of communications. Limited on-site assistance to you will be permitted if we have resources available. (Franchise Agreement, Section 6.14)
- 4. We will administer the Brand Fund and Regional Fund (if we establish a Regional Fund), as described below in this Item. (Franchise Agreement, Sections 9.1 - 9.4)

Neither the Franchise Agreement nor any other agreement, requires us to provide any other assistance or services to you during the operation of the Franchised Business.

## Training

If this is your first Engineering For Kids Business, you (or the Operating Principal, if you are a corporation or other entity) and any other Designated Employee must attend and successfully complete, to our satisfaction, the initial training program that we offer on operating an Engineering For Kids Business. The training is conducted at designated locations (such as conferenced facilities) or virtually.

Question 18

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the ongoing support and training they provide to franchisees (Item 11)?

Accepted Answer

Jonathan Hayes is responsible for running our training programs. Jonathan has more than 20 years of experience in the education franchising sector, including franchisee training and development and franchise support. Jonathan is also responsible for the development of numerous processes, manuals and franchisee support resources.

We may use additional staff to assist in training. These individuals have generally between one-half to four years of experience with us or our affiliate, and three to thirteen years in the subjects for which they will provide instruction. A printed copy of the Brand Excellence Manual will be the principal instruction material, and we also use other handouts and training videos.

Training classes are held on an as-needed basis at a designated training facilities (which may include locations with conference facilities) or remotely. You will be responsible for any costs that you and your trainees incur, including your travel and living expenses, in attending the initial training program and any additional training programs.

You (or your managing owner), and/or other previously trained and experienced employees must also attend and satisfactorily complete various training courses that we periodically provide at the times and locations we designate. We will not require attendance for more than a total of 10 days during a calendar year. Besides attending these courses, we may require that you must attend an annual meeting of all franchisees at a location we designate. We will not require attendance at the annual meeting for more than 3 days during any calendar year. You are responsible for all related travel and living expenses and wages.

Question 19

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the system standards they set for franchisees (Item 8)?

Accepted Answer

[Item 1: THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES]

Engineering For Kids Businesses and System.

Engineering For Kids Businesses provide educational activities, namely, providing seminars, classes, camps, workshops, conferences, and programs in the fields of math, science, technology, and engineering using specified business formats, methods, procedures, designs, layouts, standards, and specifications, items and products that we may designate or approve from time to time ("**Programs**"). The Programs have traditionally been conducted in person.

We own a distinctive set of specifications and operating standards and procedures (collectively, the "**System**") for Engineering For Kids Businesses. The distinguishing characteristics of the System include our professional image and high customer service standards; our standards, specifications and teaching methods for our Programs; Program materials, equipment, and supplies, which may include using course materials, supplies and equipment that are designed and prepared according to our proprietary standards (together "**Proprietary Materials**"); our techniques for marketing and scheduling Programs; standards and

specifications for educational materials and other related products for sale to customers ("**Authorized Products**"); and our techniques for identifying, recruiting and retaining qualified employees and instructors; the accumulated experience reflected in our training program and operating procedures, and distinctive exterior and interior design for those Engineering For Kids Businesses that operating from a central learning center. These are not necessarily all of the elements of the System. We may change, improve, add to, delete from and further develop the elements of the System from time to time.

#### **6. OPERATIONS**

#### **6.1. Compliance with Standards and System Changes**

You agree to comply with all mandatory standards, specifications and operating procedures set forth from time to time in our Manual. You acknowledge that the services and operation of your Franchised Business, accounting practices, record keeping and reporting practices, and software are important to us and our other franchisees. However, you acknowledge that we have the right to vary our standards and specifications, in our reasonable judgment, to accommodate circumstances of individual franchisees. We have the right from time to time to change or modify the System, including modifications to the Manual, the Programs, Proprietary Materials, curriculum, approved suppliers, the required equipment, the signage, and other aspects of the Franchised Business, the adoption of new administrative forms and methods of reporting and payment of any monies owed to us (including electronic means of reporting and payment). You agree to accept and implement any such changes or modifications to the System as if they were a part of the System at the time this Agreement was signed, and you will make such expenditures as the changes or modifications in the System may reasonably require. However, if any discontinued portion of the System, could pose a hazard to the public or prove detrimental to the System, you must cease selling that item or offering that service immediately.

#### **6.2. Programs and Services You May Offer**

You may offer customers only the Programs and other products and services that we have expressly authorized in writing for Engineering For Kids Businesses to offer, as further provided in Section 7 of this Agreement. We may make this designation in the Manual or otherwise in writing. We have the right to change the authorized Programs, Proprietary Materials and other curricula, products and services (provided that offering educational programs in the fields of math, science, technology, and engineering will remain a core offering), and we may designate specific Programs, products or services as optional or mandatory. You acknowledge that we may approve some products, services, Programs, and other items for certain franchisees and clients and not others based on legitimate business reasons.

Question 20

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the trademarks they own and allow franchisees to use (Item 13)?

Accepted Answer

[Item 1: THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES]

#### Acquisition of the System, Our Predecessor and Background of the System

The "Engineering for Kids" franchise system was first developed and operated by our predecessor and its affiliate. On October 31, 2020 (the "**Acquisition Date**"), we became the franchisor of the "Engineering for Kids" franchise system through as asset purchase from EK Franchising Company ("**EKFC**") and Engineering for Kids, Inc. ("EFKI"). As of the Acquisition Date, we and our parent, LaunchLife USA, Inc. purchased the assets used in operating the franchise system, including all existing franchise agreements and international master franchise agreements, and the "Engineering for Kids" and related trademarks.

EKFC is a Virginia corporation that was formed on July 27, 2010. EFKI is a Virginia corporation that was formed on February 2, 2009. EKFC and EFKI have their principal place of business at 1320 Central Park Boulevard, Suite 201, Fredericksburg, Virginia 22401. EFKI operated the first Engineering For Kids Business in Stafford, Virginia from 2009 until the Acquisition Date. From September 2011 to the Acquisition Date, EKFC offered franchises for Engineering For Kids Businesses Except as stated, EKFI and EKFC never offered franchises in any line of business or conducted any other business.

[Item 1: THE FRANCHISOR, AND ANY PARENTS, PREDECESSORS, AND AFFILIATES]

We identify the businesses operating under the System by means of the "Engineering For Kids" name and certain other trademarks, service marks, trade names, signs, logos, and other indicia of origin (collectively, the "**Proprietary Marks**"). We may designate other trade names, service marks, and trademarks as Proprietary Marks.

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

You may neither establish nor permit any other party to establish an Online Site relating to refers to the Engineering

For Kids Business, Proprietary Marks, us, or the System. Additionally, you may not offer, promote, or sell any products or services, or make any use of the Proprietary Marks, through the Internet or an Online Site without our prior written approval. If we decide to grant our consent, we have the right to require that you adhere to certain rules and standards concerning any Online Site. These may include: (1) before establishing any Online Site, you must submit to us, for our prior written approval, a sample of the proposed Online Site, including its domain name, format, visible content (including, without limitation, proposed screen shots), and non-visible content (including meta tags), in the form and manner we may require; (2) you must not use or modify an Online Site without our prior written approval; (3) you must comply with the standards and specifications for Online Sites that we may periodically prescribe in the Manuals or otherwise in writing; (4) if we require, you must establish hyperlinks to our Online Site and other Online Sites; and (5) we may require you to make us the sole administrator (or co-administrator) of any social networking pages that you maintain or that are maintained on your behalf.

Question 21

How does the Engineering For Kids franchisor's business experience (Item 2) relate to the trademarks they allow franchisees to use (Item 13)?

Accepted Answer

e System

The "Engineering for Kids" franchise system was first developed and operated by our predecessor and its affiliate. On October 31, 2020 (the "**Acquisition Date**"), we became the franchisor of the "Engineering for Kids" franchise system through as asset purchase from EK Franchising Company ("**EKFC**") and Engineering for Kids, Inc. ("EFKI"). As of the Acquisition Date, we and our parent, LaunchLife USA, Inc. purchased the assets used in operating the franchise system, including all existing franchise agreements and international master franchise agreements, and the "Engineering for Kids" and related trademarks.

EKFC is a Virginia corporation that was formed on July 27, 2010. EFKI is a Virginia corporation that was formed on February 2, 2009. EKFC and EFKI have their principal place of business at 1320 Central Park Boulevard, Suite 201, Fredericksburg, Virginia 22401. EFKI operated the first Engineering For Kids Business in Stafford, Virginia from 2009 until the Acquisition Date. From September 2011 to the Acquisition Date, EKFC offered franchises for Engineering For Kids Businesses Except as stated, EKFI and EKFC never offered franchises in any line of business or conducted any other business.

#### Our Parents and Affiliates

Our parents include our direct parent, LaunchLife USA, Inc. ("**LaunchLife USA**") (formerly named Academy of Learning USA, Inc.), with its principal business at 100 York Boulevard, Richmond Hill, Ontario, L4B 1J8 Canada. LaunchLife International Inc. ("**LLI**") and LaunchLife Holdings Inc. ("**LHI**") have been our indirect parents. On December 19, 2024, LLI and LLH were

amalgamated to form Launchlife International Inc., whose principal business address is the same as LaunchLife USA. Launchlife International Inc. is the parent of LaunchLife USA and our indirect parent.

Question 22

How does the Engineering For Kids franchisor's experience (Item 2) potentially influence the system standards they set for franchisees (Item 8)?

Accepted Answer

e System

The "Engineering for Kids" franchise system was first developed and operated by our predecessor and its affiliate. On October 31, 2020 (the "**Acquisition Date**"), we became the franchisor of the "Engineering for Kids" franchise system through as asset purchase from EK Franchising Company ("**EKFC**") and Engineering for Kids, Inc. ("EFKI"). As of the Acquisition Date, we and our parent, LaunchLife USA, Inc. purchased the assets used in operating the franchise system, including all existing franchise agreements and international master franchise agreements, and the "Engineering for Kids" and related trademarks.

EKFC is a Virginia corporation that was formed on July 27, 2010. EFKI is a Virginia corporation that was formed on February 2, 2009. EKFC and EFKI have their principal place of business at 1320 Central Park Boulevard, Suite 201, Fredericksburg, Virginia 22401. EFKI operated the first Engineering For Kids Business in Stafford, Virginia from 2009 until the Acquisition Date. From September 2011 to the Acquisition Date, EKFC offered franchises for Engineering For Kids Businesses Except as stated, EKFI and EKFC never offered franchises in any line of business or conducted any other business.

#### Our Parents and Affiliates

Our parents include our direct parent, LaunchLife USA, Inc.

Question 23

What is the relationship between the Engineering For Kids initial franchise fee in Item 5 and the availability of financing options in Item 10?

Accepted Answer

AL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently \$30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us \$225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

*Veteran's discount* – As a way to assist honorably discharged veterans of the U.S. Armed Forces in becoming a franchised business owner, we will reduce the Initial Franchise Fee for a standard Territory by 10% for qualifying veterans who enter into a Franchise Agreement with us.

*Existing Franchisee discount* – We also want to encourage our existing franchisees in good standing to develop additional Franchised Business. To do so, our current policy is that we will reduce the Initial Franchise Fee by 10% for our franchisees who are in good standing, have been in operation for at least one year, and who enter into an additional Franchise Agreement with us. We may discontinue or alter this policy in the future.

Question 24

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the estimated initial investment for rent (Item 7)?

Accepted Answer

STMENT**

#### **YOUR ESTIMATED INITIAL INVESTMENT**

| Type of Expenditure           | Amount              | Method of Payment | When Due                             | To Whom Payment Is To Be Made |
|-------------------------------|---------------------|----------------------|--------------------------------------|-------------------------------------|
| Initial Franchise Fee (1) | \$30,000 | Lump Sum | On signing Franchise Agreement | Us |
| Rent (2) | \$7,500

Question 25

What is the relationship between the initial franchise fee for Engineering For Kids in Item 5 and the estimated total initial investment in Item 7?

Accepted Answer

[Item 7: ESTIMATED INITIAL INVESTMENT]

| Type of Expenditure           | Amount              | Method of Payment | When Due                             | To Whom Payment Is To Be Made |
|-------------------------------|---------------------|----------------------|--------------------------------------|-------------------------------------|
| Initial Franchise Fee (1) | $30,000 | Lump Sum | On signing Franchise Agreement | Us |

[Item 5: INITIAL FEES]

## **ITEM 5 INITIAL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently $30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us $225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

Question 26

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the ongoing fees that a franchisee must pay (Item 6)?

Accepted Answer

[Item 5: INITIAL FEES]

## **ITEM 5 INITIAL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently $30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us $225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

*Veteran's discount* – As a way to assist honorably discharged veterans of the U.S. Armed Forces in becoming a franchised business owner, we will reduce the Initial Franchise Fee for a standard Territory by 10% for qualifying veterans who enter into a Franchise Agreement with us.

*Existing Franchisee discount* – We also want to encourage our existing franchisees in good standing to develop additional Franchised Business. To do so, our current policy is that we will reduce the Initial Franchise Fee by 10% for our franchisees who are in good standing, have been in operation for at least one year, and who enter into an additional Franchise Agreement with us. We may discontinue or alter this policy in the future.

#### Training Fee (for more than 2 trainees)

We will provide initial training and training materials for up to two trainees at no additional charge to you. If you send more than two people to initial training, we will charge you a $300 per day training fee for each additional person. Training fees are due to us before you begin initial

Question 27

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the ongoing support and assistance provided by the franchisor (Item 11)?

Accepted Answer

[Item 11: FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING]

**Except as listed below, we are not required to provide you with any assistance.**

## Pre–opening Obligations

Before you open your Franchised Business:

- 1. We will furnish you with our standard site selection guidelines, including our minimum standards for Third Party Sites. (Section 4.1 of Franchise Agreement) We will furnish you with our standard site selection guidelines, including our minimum standards for an EFK Center Location. (Section 2.1 of the EFK Learning Center Location Addendum) Unless otherwise noted, the term "**Authorized Location**" applies to both the Third Party Sites that you secure in accordance with our standards and procedures and (if applicable to your business) to the location that we approve to serve as your EFK Center Location.
- 2. We will furnish you with the general design plans and a basic layout to use at the Authorized Locations. To the extent necessary, you must prepare each Authorized Location for operation as an Engineering For Kids Business at your own expense. To the extent that we establish specifications, or designate suppliers for particular services, products, supplies, materials and equipment that you use in the operation of the Franchised Business or resell through your Franchised Business, we will provide this information to you via the Manual. (Sections 4.3 and 6.3 of Franchise Agreement)
- 3. We will review your proposals for an EFK Center Location and (if we deem advisable) conduct on-site evaluations in response to your request for our approval of a proposed EFK Center Location. (Section 2.3 of the EFK Learning Center Location Addendum). You are responsible for finding your own site (see below in this Item under "Site Approval Process").
- 4. We will provide you with: (a) our general plans, specifications and layouts for an EFK Learning Center Location, including requirements for dimensions, design, image, interior

During the operation of your Franchised Business.

- 1. We may conduct, as we deem advisable, periodic inspections of the Franchised Business, and may evaluate the services rendered and products sold by your Franchised Business. (Franchise Agreement, Section 6.10)
- 2. We will offer you additional mandatory or optional training programs, if we determine them to be appropriate. We may charge a reasonable training fee for additional training programs, whether mandatory or optional. (Franchise Agreement, Section 5.2)
- 3. We will make available to you information about new developments, techniques, and improvements in the areas of operations, management, and marketing, to the same extent as we make the information available to other Engineering For Kids Business franchisees in good standing. We may provide this information through the distribution of printed or filmed material, an Intranet or other electronic forum, meetings or seminars, individual or group counseling, training programs, telephone communications, or other forms of communications. Limited on-site assistance to you will be permitted if we have resources available. (Franchise Agreement, Section 6.14)
- 4. We will administer the Brand Fund and Regional Fund (if we establish a Regional Fund), as described below in this Item. (Franchise Agreement, Sections 9.1 - 9.4)

Neither the Franchise Agreement nor any other agreement, requires us to provide any other assistance or services to you during the operation of the Franchised Business.

During any periods that the Brand Fund is in effect, you must contribute the amounts that we specify to the Brand Fund as described in the first paragraph above under "Ongoing Advertising". We may use your contributions and any earnings on the Brand Fund for any costs associated with local, regional, and/or national advertising, marketing, public relations, and/or promotional programs and materials, and any other activities we believe would benefit Franchised Businesses and "Engineering For Kids" brand and the System generally, including advertising campaigns in various media; creation and maintenance of online marketing (including one or more websites or other Online Sites (as defined below), social media/networking and other digital media); direct mail advertising; market research and testing, including secret customers and customer satisfaction surveys; employing advertising and/or public relations agencies; purchasing promotional items; conducting and administering promotions, contests, giveaways, public relations events, community involvement activities, etc.; providing promotional and other marketing materials and services to our franchisees; and development of, or producing for franchisees, materials and items used in the Businesses for customer viewing and use; and on materials and/or services designed to promote the brand and employment opportunities in order to facilitate selection and hiring of qualified staff. We have the right to deduct from the Brand Fund 15% of the monies in the Brand Fund on contributions for administration and management of the Brand Fund. We have the right to direct all marketing programs, with the final decision over creative concepts, materials and media used in the programs and their placement. The Brand Fund contributions may be used for national, regional and/or local adver

This equipment will be used for recording all sales and related activities, Gross Sales, and customer information. You must record all sales by business category (After-School Programs, Workshops, Birthday Parties, Special Events, and Camps) and related activities. You must use the online customer registration software program and credit card processing gateway software and services (the "Merchant Services") that we designate or approve. Although we reserve the right to change software requirements, currently, we suggest that you use the *Amilia's* software program, which will be operated as part of a website interface that customers will use to sign up and pay for classes with your Franchised Business and includes Merchant Services. At this time, other than suggesting the use of *Amilia* for the customer registration and Merchant services, we have not designated required vendors for these items and services, and you may purchase the computer hardware and software from any supplier, if the equipment meets our specifications.

If we adopt and implement a computer network record-keeping system and/or other technology-related tools to allow you to more effectively manage your Engineering For Kids Franchise, to allow us to have independent and instant on-line access to your records, and/or for other business purposes, you must purchase the required equipment, input all required information related to the new systems or tools, participate as required in any new program, and pay any applicable technology fees charged by us or our designee, to assist in covering costs of the applicable program/system/tools.

You must upgrade any hardware component or software program as we require during the term of the Franchise Agreement. We have no obligation to provide assistance to you in obtaining the computer hardware and software (other than providing the specifications for these items), or to provide ongoing maintenance, repairs or updates to your computer system. There are no contractual limits on the frequency or cost of your obligations to obtain these upgrades.

Question 28

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the potential for adding additional schools to the territory?

Accepted Answer

AL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently \$30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us \$225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully ear

Question 29

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the potential for building a successful and rewarding career as a franchise owner?

Accepted Answer

[Item 5: INITIAL FEES]

## **ITEM 5 INITIAL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently $30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us $225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

*Veteran's discount* – As a way to assist honorably discharged veterans of the U.S. Armed Forces in becoming a franchised business owner, we will reduce the Initial Franchise Fee for a standard Territory by 10% for qualifying veterans who enter into a Franchise Agreement with us.

*Existing Franchisee discount* – We also want to encourage our existing franchisees in good standing to develop additional Franchised Business. To do so, our current policy is that we will reduce the Initial Franchise Fee by 10% for our franchisees who are in good standing, have been in operation for at least one year, and who enter into an additional Franchise Agreement with us. We may discontinue or alter this policy in the future.

Question 30

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the potential for discounts mentioned in the same item?

Accepted Answer

AL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently \$30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us \$225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

*Veteran's discount* – As a way to assist honorably discharged veterans of the U.S. Armed Forces in becoming a franchised business owner, we will reduce the Initial Franchise Fee for a standard Territory by 10% for qualifying veterans who enter into a Franchise Agreement with us.

*Existing Franchisee discount* – We also want to encourage our existing franchisees in good standing to develop additional Franchised Business. To do so, our current policy is that we will reduce the Initial Franchise Fee by 10% for our franchisees who are in good standing, have been in operation for at least one year, and who enter into an additional Franchise Agreement with us. We may discontinu

Question 31

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the potential for earning revenue within the granted territory (Item 12)?

Accepted Answer

AL FEES**

#### Initial Franchise Fee

When you sign your Franchise Agreement, you will pay us an initial franchise fee ("**Initial Franchise Fee**"). The Initial Franchise Fee is currently \$30,000 unless you qualify for one of the 10% discounts described below. The Territory granted will be for approximately 100 schools with grades including some or all of kindergarten through eighth grade. If you desire to add additional schools to the Territory, you must pay us \$225 for each school. The Initial Franchise Fee must be paid in one lump-sum amount, will be fully earned when paid, and is non-refundable.

*Veteran's discount* – As a way to assist honorably discharged veterans of the U.S. Armed Forces in becoming a franchised business owner, we will reduce the Initial Franchise Fee for a standard Territory by 10% for qualifying veterans who enter into a Franchise Agreement with us.

*Existing Franchisee discount* – We also want to encourage our existing franchisees in good standing to develop additional Franchised Business.

Question 32

What is the relationship between the Engineering For Kids initial franchise fee (Item 5) and the potential for making a positive contribution to the community through STEM education?

Accepted Answer

Engineering For Kids Businesses provide educational activities, namely, providing seminars, classes, camps, workshops, conferences, and programs in the fields of math, science, technology, and engineering using specified business formats, methods, procedures, designs, layouts, brand standards, and specifications, items and products that we may designate or approve from time to time ("**Programs**").

Question 33

What action should a prospective Engineering For Kids franchisee take if the Disclosure Document contains a false statement?

Accepted Answer

If Engineering for Kids International, LLC does not deliver this Disclosure Document on time or if it contains a false or misleading statement or a material omission, a violation of federal and state law may have occurred and should be reported to the Federal Trade Commission, Washington, D.C. 20580 and to the appropriate state agency listed in Exhibit B.

Source: Item 22 — CONTRACTS (FDD page 53)

Question 34

What happens if an Engineering For Kids franchisee fails to obtain or maintain required insurance?

Accepted Answer

If you fail to obtain and maintain insurance coverage as required by this Agreement, we have the right, but not the obligation, to obtain the required insurance on your behalf and to charge you for the cost of the insurance plus a reasonable fee for our services in procuring the insurance.

...

- **15.2.15.** You fail to obtain or maintain required insurance.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 35

According to Section 6.9, what are the specific terms and conditions that Engineering For Kids will negotiate for Programs conducted at Large Accounts?

Accepted Answer

#### **6.9. Large Accounts**

- **6.9.1.** You acknowledge that our negotiation of certain select and/or strategic Large Accounts, including the Programs to be offered and the rates and services to be performed, enhances the potential value of the System and inures to your benefit as well as to our benefit and that of other Engineering For Kids Business franchisees. Accordingly, we reserve the right to administer a Large Accounts program for the System. If we establish a Large Account program, you must service Large Account clients in your Territory on our behalf, in accordance with the pricing and other terms that we negotiate with the Large Account client. You may not enter into any relationship with a Large Account client that we deem to conflict with the client's Large Account arrangement with us. Certain Large Account clients may require that we provide additional volume rebates, which we will negotiate with the client on a caseby-case basis. If an additional rebate is required, we will notify you before signing the Large Account contract, and you will have the option not to participate in that Large Account contract. We will not pay you for your services to a Large Account client until you submit the appropriate documentation.
- **6.9.2.** You may terminate your participation in the Large Account program at any time by giving us at least 30 days' prior written notice. If you terminate your participation in the Large Account program, or if you fail to satisfy the conditions and obligations of any Large Account agreement, we have the right to service and/or authorize others to service Large Account clients inside your Territory without any compensation to you. This right is an exception to your territorial protection. We have no obligation to readmit you into the Large Account program or to transfer any Large Account client to you if you are subsequently willing and able to provide service inside your Territory.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 36

In administering the Engineering For Kids Brand Fund, must Engineering For Kids ensure that I benefit directly or pro rata from advertising or promotion conducted in connection with the Brand Fund?

Accepted Answer

Advertising contributions are intended to maximize general public recognition and acceptance of the Proprietary Marks for the benefit of the System as a whole. In administering the Brand Fund, we need not make expenditures for you that are equivalent or proportionate to your advertising contributions or insure that you benefit directly or pro rata from advertising or promotion conducted in connection with the advertising

contributions. Any promotional materials produced with Brand Fund monies will be made available to you at a reasonable cost, and the proceeds of such sales will also be deposited in the Brand Fund account.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)

Question 37

Is Engineering For Kids authorized to supplement the information provided in Item 19 with information about possible performance of a particular location?

Accepted Answer

You acknowledge and agree that, if we have recommended, approved or given you information regarding a site for the Authorized Center Location, that is not a representation or warranty of any kind, express or implied, of the suitability of the site for an Engineering For Kids Business or any other purpose.

Our recommendation indicates only that we believe that the site meets our then acceptable criteria.

Applying criteria that have appeared effective with other sites and premises might not accurately reflect the potential for all sites and premises, and demographic and/or other factors included in or excluded from our criteria could change, altering the potential of a site and premises.

The uncertainty and changeable nature of these criteria and factors are beyond our control, and we are not responsible if a site and premises we recommend fail to meet your expectations.

You acknowledge and agree that your acceptance of the obligation to develop the Business is based on your own independent investigation of the suitability of the site for the Business and that you are solely responsible for all due diligence and related costs to determine the suitability of a proposed site for the Franchised Business, including the costs related to issues that arise after the commencement of construction.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD page 48)

Question 38

Who bears the cost of defense if an Engineering For Kids franchisee does NOT use the Proprietary Marks in compliance with the Franchise Agreement?

Accepted Answer

We will defend you against any third party claim, suit, or demand arising out of your use of the Proprietary Marks. If we determine that you have used the Proprietary Marks in compliance with the Franchise Agreement, we will bear the cost of defense, including the cost of any judgment or settlement, as well as your out of pocket costs (except that you will bear the salary costs of your employees). If we determine that you have not used the Proprietary Marks in compliance with the Franchise Agreement, you must bear the cost of defense, including the cost of any judgment or settlement, and you must promptly reimburse us for those amounts. If there is any litigation due to your use of the Proprietary Marks, you must sign all documents and do all things as may be necessary to carry out a defense or prosecution, including becoming a nominal party to any legal action.

Source: Item 13 — TRADEMARKS (FDD pages 41–42)

Question 39

Who bears the cost of defense if an Engineering For Kids franchisee uses the Proprietary Marks in compliance with the Franchise Agreement?

Accepted Answer

We will defend you against any third party claim, suit, or demand arising out of your use of the Proprietary Marks. If we determine that you have used the Proprietary Marks in compliance with the Franchise Agreement, we will bear the cost of defense, including the cost of any judgment or settlement, as well as your out of pocket costs (except that you will bear the salary costs of your employees). If we determine that you have not used the Proprietary Marks in compliance with the Franchise Agreement, you must bear the cost of defense, including the cost of any judgment or settlement, and you must promptly reimburse us for those amounts. If there is any litigation due to your use of the Proprietary Marks, you must sign all documents and do all things as may be necessary to carry out a defense or prosecution, including becoming a nominal party to any legal action.

Source: Item 13 — TRADEMARKS (FDD pages 41–42)

Question 40

Besides the states listed, could other states require Engineering For Kids to register, file, or be exempt from franchise laws?

Accepted Answer

Other states may require registration, filing, or exemption of a franchise under other laws, such as those that regulate the offer and sale of business opportunities or seller-assisted marketing plans.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 41

Is business interruption insurance required for all Engineering For Kids franchisees, or only under specific circumstances?

Accepted Answer

| General Liability | $1,000,000 | Per Occurrence |
|---|---|---|
|  | $3,000,000 | In the Aggregate |
| Fire Damage | $100,000 | Not less than per Occurrence |
| Medical Expense | $5,000 | Not less than Per Person |
| Automobile Liability (bodily injury and property) | $1,000,000 | Combined limits (including coverage for non-owned auto exposure) |
| Workmen’s Compensation | As required by law | For 12 months actual loss sustained |
| Business Interruption | $20,000 | Not less than Per Month |
| (applies only if you have a |  |  |
| Learning Center) |  |  |

Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES\ (FDD pages 19–24)

Question 42

Can Engineering For Kids change the designated 'Period' from monthly to bi-weekly or weekly?

Accepted Answer

against us or others. You also agree that you will not, on grounds of any alleged non-performance by us or others, withhold payment of any fee, including without limitation Royalty fees or Advertising Contributions, nor withhold or delay submission of any reports due hereunder including but not limited to Sales Reports.

#### **3.6. Technology Fee**

You must pay us an ongoing monthly "Technology Fee" that we require, at such times and in such amounts as we may designate. The Technology Fee as of the Agreement Date is Two Hundred Dollars (\$200) per month, but we reserve the right to increase this f

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 43

Can Engineering For Kids change the designated 'Period' for royalty payments?

Accepted Answer

You must pay the Royalty to us each Period, based on your Gross Sales in the previous Period. For each Period, you also must report to us in writing (or electronically) your Gross Sales (a "**Sales Report**") at the time specified in Section 3.4 below. For purposes of this Agreement, unless otherwise designated by us in writing, a "Period" is a Month, but we have the right upon written notice change the designated Period to alternative time frames including bi-weekly or weekly. The term "**Month**" means a calendar month, or another 4-5 week period that we may periodically designate.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 44

What condition must an Engineering For Kids franchisee meet to qualify for reduced Applicable Royalty Rates?

Accepted Answer

You acknowledge and agree that the rights granted under this Agreement, including but not limited to the limited territorial grant described in this Section 1, are conditioned upon your compliance with this Agreement. In addition, your Franchised Business must generate a minimum level of Gross Sales (defined in Section 3.2.3 below) on an annual basis for each Operating Year (as defined below), in the amounts set forth in Appendix A (the "**Minimum Performance Standards**"). For the purposes of the Minimum Performance Standards, your first "**Operating Year**" will begin on the first day of the Period for which you must submit your first Royalty payment and Sales Report, and will continue for the next reporting periods until the first anniversary of the date on which your first Operating Year began. Each subsequent Operating Year will be the immediately following twelve month period. If you fail to satisfy the Minimum Performance Standards, then we may take any one or more of the following actions:

- **1.4.1.** Reduce the size of your Territory; and/or
- **1.4.2.** Permit other franchisees, or us or our affiliates, to provide conduct Programs and Special Event Services at locations within your Territory; and/or
- **1.4.3.** Establish, or license or franchise others to establish, Engineering For Kids Business in your Territory; and/or

**1.4.4.** Terminate this Agreement pursuant to Sections 15.2.16 (which provides an opportunity to cure with respect to a failure to satisfy the Minimum Performance Standard for your first Operating Year (as defined in Appendix A) and 15.2.17.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 45

What conditions must an Engineering For Kids franchisee meet to qualify for the reduced Applicable Royalty Rates?

Accepted Answer

You acknowledge and agree that the rights granted under this Agreement, including but not limited to the limited territorial grant described in this Section 1, are conditioned upon your compliance with this Agreement. In addition, your Franchised Business must generate a minimum level of Gross Sales (defined in Section 3.2.3 below) on an annual basis for each Operating Year (as defined below), in the amounts set forth in Appendix A (the "**Minimum Performance Standards**"). For the purposes of the Minimum Performance Standards, your first "**Operating Year**" will begin on the first day of the Period for which you must submit your first Royalty payment and Sales Report, and will continue for the next reporting periods until the first anniversary of the date on which your first Operating Year began. Each subsequent Operating Year will be the immediately following twelve month period. If you fail to satisfy the Minimum Performance Standards, then we may take any one or more of the following actions:

- **1.4.1.** Reduce the size of your Territory; and/or
- **1.4.2.** Permit other franchisees, or us or our affiliates, to provide conduct Programs and Special Event Services at locations within your Territory; and/or
- **1.4.3.** Establish, or license or franchise others to establish, Engineering For Kids Business in your Territory; and/or

**1.4.4.** Terminate this Agreement pursuant to Sections 15.2.16 (which provides an opportunity to cure with respect to a failure to satisfy the Minimum Performance Standard for your first Operating Year (as defined in Appendix A) and 15.2.17.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 46

Does Engineering For Kids currently anticipate conflicts arising between franchisees of affiliated brands and Engineering For Kids franchisees?

Accepted Answer

As disclosed in Item 1, as of the date of this disclosure document, we are affiliated with the following entities: (i) SIE USA, SIE, and Affiliate SIE Subfranchisor, which offer franchises for School is Easy Tutoring Businesses that operate under the "School is Easy" mark; (ii) Pitman Training Group Limited, which offers franchises for independent training and testing in the United Kingdom and Ireland that operate under the Pitman Training name; and (iii) Academy of Learning, Inc., which offers franchises for Academy of Learning Career Colleges in the continuing adult education services industry in Canada that operate under the Academy of Learning Career Colleges or AOLCC names. In addition, certain of our parents and/or affiliates (and/or their owners), may in the future invest in other companies that offer franchises and/or own educational enterprises that may compete with the type business being franchised under this disclosure document. We do not currently anticipate conflicts arising between franchisees of the possibly deemed affiliated brands and those of Engineering For Kids, and as such, do not have a plan for how to resolve disputes regarding territory, customers and/or franchisor support in the event they arise. However, current and/or future outlets of such possibly deemed affiliated brands – as well

Source: Item 12 — TERRITORY (FDD pages 36–41)

Question 47

Will Engineering For Kids defend a franchisee against a third-party claim if the franchisee used the Proprietary Marks in compliance with the Franchise Agreement?

Accepted Answer

We will defend you against any third party claim, suit, or demand arising out of your use of the Proprietary Marks. If we determine that you have used the Proprietary Marks in compliance with the Franchise Agreement, we will bear the cost of defense, including the cost of any judgment or settlement, as well as your out of pocket costs (except that you will bear the salary costs of your employees). If we determine that you have not used the Proprietary Marks in compliance with the Franchise Agreement, you must bear the cost of defense, including the cost of any judgment or settlement, and you must promptly reimburse us for those amounts. If there is any litigation due to your use of the Proprietary Marks, you must sign all documents and do all things as may be necessary to carry out a defense or prosecution, including becoming a nominal party to any legal action.

Source: Item 13 — TRADEMARKS (FDD pages 41–42)

Question 48

What is the dependency related to providing Special Event Services outside of the Engineering For Kids franchisee's territory?

Accepted Answer

- **1.2.5.** You may accept requests to provide Special Event Services to be provided and conducted outside of the Territory so long as the request is from or referred by an existing customer of your Franchised Business who attends Programs at your Authorized Location(s) and you did not obtain the request in violation of Section 1.2.1.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 49

What is the dependency between the termination of the Engineering For Kids franchise agreement and the obligation to pay royalties?

Accepted Answer

- **16.1.

Your Obligations.** Upon termination or expiration of this Agreement for any reason, unless we direct you otherwise:

- **16.1.1.** You must promptly pay all sums owing to us, our affiliates and suppliers, including, but not limited to, Royalty fees, Advertising Allocations, or other fees, damages, expenses, and attorney's fees incurred as a result of your default.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 50

Can educational enterprises owned, operated, or invested in by parents and/or affiliates of Engineering For Kids be located in an Engineering For Kids franchisee's territory?

Accepted Answer

as current and/or future educational enterprises owned, operated or invested in by our parents and/or affiliates (and/or their owners) – may be located in your Territory (including immediately proximate to your Territory) and may have the right to use other channels of distribution, such as the Internet, catalog sales, telemarketing, or other direct marketing, to make sales within your Territory.

Source: Item 12 — TERRITORY (FDD pages 36–41)

Question 51

What is the effect of the termination of the license agreement on existing Engineering For Kids franchise agreements?

Accepted Answer

Under a License Agreement dated November 1, 2020 with LaunchLife USA, LaunchLife USA has licensed us the right to use the Proprietary Marks and to sublicense it to our franchisees for use in operating Engineering For Kids Businesses The license agreement is perpetual, but either we or LaunchLife USA may terminate it with 30 days' notice to the other. However, termination of the license agreement will not affect existing franchise agreements as LaunchLife USA will permit franchisees to continue operating under the terms of their existing franchise agreements. No other agreement limits our right to use or license the Proprietary Marks.

Source: Item 13 — TRADEMARKS (FDD pages 41–42)

Question 52

Does the Engineering For Kids Franchise Agreement allow a member to engage in a Competitive Business during the term of the agreement?

Accepted Answer

- (b) Member covenants and agrees that during the term of the Franchise Agreement, except as otherwise approved in writing by EFK, Member shall not, either directly or indirectly, for itself, or through, on behalf of, or in conjunction with any person, persons, partnership, corporation, or entity:
  - **15.3.7.** (i) Own, manage, engage in, be employed by, advise, make loans to, consult for, rent or lease to, or have any other interest in any Competitive Business (the term "**Competitive Business**" means a business engaged in the provision of services that are the same as or similar to an Engineering For Kids Business, including, but not limited to, the provision of youth educational and enrichment programs and services relating to the fields of math, science, technology or engineering; and the term "**Competitive Business**" also includes making use of the customer lists and other data

pertaining to the Engineering For Kids Business for any purpose whatsoever other than in connection with your Engineering For Kids Business pursuant to this Agreement); or

- **15.3.8.** (ii) Divert or attempt to divert any business or customer, or potential business or customer, to any Competitive Business;

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 53

After the Engineering For Kids Franchise Agreement terminates, can a member own a Competitive Business inside the Territory without written approval from EFK?

Accepted Answer

advise, make loans to, consult for, rent or lease to, or have any other interest in any Competitive Business (the term "**Competitive Business**" means a business engaged in the provision of services that are the same as or similar to an Engineering For Kids Business, including, but not limited to, the provision of youth educational and enrichment programs and services relating to the fields of math, science, technology or engineering; and the term "**Competitive Business**" also includes making use of the Data for any purpose whatsoever other than in connection with your Engineering For Kids Business pursuant to this Agreement); or

**17.3.2.** Divert or attempt to divert any business, customer, or participant, or potential business, customer, or participant, to any Competitive Business.

#### **17.4. After Termination, Expiration or Transfer**

For two (2) years from the date of: (a) a Transfer permitted under Section 14 above; (b) expiration or termination of this Agreement (regardless of the cause for termination); or (c) a final order of a duly authorized arbitrator, panel of arbitrators, or a court of competent jurisdiction (after all appeals have been taken) with respect to any of the foregoing or with respect to the enforcement of this Section 17.4 (collectively, the "**Post-Term Period**"); you agree that you will not directly or indirectly own, manage, engage in, be employed by, advise, make loans to, consult for, or have any other interest in any Competitive Business that is, or intends to operate, inside the Territory, within an area extending five (5) miles beyond the perimeter of the Territory, and/or within any other Territory in which an Engineering For Kids Business operates at the time of expiration, termination, or transfer. You also agree that during the Post-Term Period you will not contact any current or former customers or participants of the Franchised Business, or divert or attempt to divert to a Competitive Business any current or former customers or participants of the Franchised Business. This Section 17.4 does not apply, of course, to another Engineering For Kids Business that you operate pursuant to a separate agreement with us that remains valid and in effect.

#### **17.5.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 54

As an Engineering For Kids franchisee, am I required to supplement the initial marketing campaign with additional advertising expenditures?

Accepted Answer

As explained above in this Item 11 (in the first two paragraphs above under "Ongoing Advertising"), we may, and currently do, designate a portion of the Advertising Obligations as the minimum amounts that you must independently spend on local marketing and advertising within your Territory. At our request, you must submit appropriate documentation to verify compliance with any local marketing and advertising spending obligations. We have the right to periodically designate in the Manual the types of expenditures that will or will not count toward your minimum spending requirement.

You must advertise your Business in online directories, as may be specified in the Manual. If you advertise jointly with other franchisees, your share of the cost will count toward your local marketing expenditure requirement.

You agree to conduct all advertising in a dignified manner and to conform to the standards and requirements we periodically specify in the Manual or in other written materials. All local marketing, advertising, and promotion must be in the media, and of the type and format, as we may approve. We will make available to you approved advertising and promotional materials, including signs, posters, collaterals, etc. that we have prepared. We will have the final decision on all creative development of advertising and promotional messages. You must submit to us, for our approval before your use, all proposed plans, promotion materials, and advertising that we did not prepare or approve in the previous year. If you do not receive our written approval within 10 business days from the date we receive the material, the material is deemed disapproved. We reserve the right to require you to discontinue the use of any advertising or marketing materials.

We may periodically require you to participate in and comply with special promotional activities for Engineering For Kids Businesses generally or in specific geographic areas or for specific types of venues. You must bear your own costs of participating locally in such promotions. (Franchise Agreement, Section 9.5)

We may periodically require you to participate in and comply with special promotional activities for Engineering For Kids Businesses generally or in specific geographic areas or for specific types of venues. You must bear your own costs of participating locally in such promotions. (Franchise Agreement, Section 9.7)

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)

Question 55

Does an Engineering For Kids franchisee need to remain in compliance with the Franchise Agreement to continue the franchise?

Accepted Answer

Continuation of your franchise or territorial rights does not depend on your achieving a certain sales volume, market penetration, or other contingency, other than satisfying the "Minimum Performance Standards" described below and remaining in compliance with the Franchise Agreement.

#### Minimum Performance Standards

The rights to operate under the Franchise Agreement, including the territorial rights described above, are conditioned upon your complying with the Franchise Agreement, including that your Franchised Business must generate a minimum level of Gross Sales on an annual basis for each Operating Year, in the amounts described in the Franchise Agreement (the "**Minimum Performance Standards**"). For this purpose, the first Operating Year will begin on the first day of the Period for which you must submit your first Royalty payment and Sales Report, and will

continue until the one-year anniversary (of the date when that Operating Year started). The current Minimum Performance Standards are:

| Operating Year*             | Minimum Annual Gross Sales at the End of Operating Year* |
|-----------------------------|-------------------------------------------------------------|
| Year 1                      | $0 - No minimum                                            |
| Year 2                      | $50,000                                                    |
| Year 3                      | $75,000

Source: Item 12 — TERRITORY (FDD pages 36–41)

Question 56

Does an Engineering For Kids franchisee need to satisfy the Minimum Performance Standards to continue the franchise?

Accepted Answer

Continuation of your franchise or territorial rights does not depend on your achieving a certain sales volume, market penetration, or other contingency, other than satisfying the "Minimum Performance Standards" described below and remaining in compliance with the Franchise Agreement.

The rights to operate under the Franchise Agreement, including the territorial rights described above, are conditioned upon your complying with the Franchise Agreement, including that your Franchised Business must generate a minimum level of Gross Sales on an annual basis for each Operating Year, in the amounts described in the Franchise Agreement (the "**Minimum Performance Standards**"). For this purpose, the first Operating Year will begin on the first day of the Period for which you must submit your first Royalty payment and Sales Report, and will

continue until the one-year anniversary (of the date when that Operating Year started). The current Minimum Performance Standards are:

| Operating Year*             | Minimum Annual Gross Sales at the End of Operating Year* |
|-----------------------------|-------------------------------------------------------------|
| Year 1                      | $0 - No minimum                                            |
| Year 2                      | $50,000                                                    |
| Year 3                      | $75,000

Source: Item 12 — TERRITORY (FDD pages 36–41)

Question 57

Can an Engineering For Kids franchisee purchase computer hardware and software from any supplier?

Accepted Answer

Although we reserve the right to change software requirements, currently, we suggest that you use the *Amilia's* software program, which will be operated as part of a website interface that customers will use to sign up and pay for classes with your Franchised Business and includes Merchant Services. At this time, other than suggesting the use of *Amilia* for the customer registration and Merchant services, we have not designated required vendors for these items and services, and you may purchase the computer hardware and software from any supplier, if the equipment meets our specifications.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)

Question 58

Does the FTC's Franchise Rule permit Engineering For Kids to provide information about potential financial performance?

Accepted Answer

The FTC's Franchise Rule permits a franchisor to provide information about the actual or potential financial performance of its franchised and/or franchisor-owned outlets, if there is a reasonable basis for the information, and if the information is included in the Disclosure Document. Financial performance information that differs from that included in Item 19 may be given only if: (1) a franchisor provides the actual records of an existing outlet you are considering buying; or (2) a franchisor supplements the information provided in this Item 19, for example, by providing information about possible performance of a particular location or under particular circumstances.

We do not make any representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets. We also do not authorize our employees or representatives to make any such representations either orally or in writing. If you are purchasing an existing outlet, however, we may provide you with the actual records of that outlet. If you receive any other financial performance information or projections of your future income, you should report it to franchisor's management by contacting David Riker our Managing Director at, 100 York Boulevard, Suite 400, Richmond Hill, ON L4B 1J8, (855) 996-9977, the Federal Trade Commission, and the appropriate state regulatory agencies.

Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD page 48)

Question 59

Does Engineering For Kids guarantee that it has appointed an agent for service of process in every state?

Accepted Answer

## **EXHIBIT C AGENTS FOR SERVICE OF PROCESS**

## **AGENTS FOR SERVICE OF PROCESS**

We intend to register this disclosure document as a "franchise" in some or all of the following states, if required by the applicable state law. If and when we pursue franchise registration (or otherwise comply with the franchise investment laws) in these states, we will designate the following state offices or officials as our agents for service of process in these states. There may be states in addition to those listed below in which we have appointed an agent for service of process. There may also be additional agents in some of the states listed.

Source: Item 22 — CONTRACTS (FDD page 53)

Question 60

What happens to existing Engineering For Kids franchise agreements if the License Agreement is terminated?

Accepted Answer

Under a License Agreement dated November 1, 2020 with LaunchLife USA, LaunchLife USA has licensed us the right to use the Proprietary Marks and to sublicense it to our franchisees for use in operating Engineering For Kids Businesses The license agreement is perpetual, but either we or LaunchLife USA may terminate it with 30 days' notice to the other. However, termination of the license agreement will not affect existing franchise agreements as LaunchLife USA will permit franchisees to continue operating under the terms of their existing franchise agreements. No other agreement limits our right to use or license the Proprietary Marks.

Source: Item 13 — TRADEMARKS (FDD pages 41–42)

Question 61

What happens to the Engineering For Kids franchisee's right to use data if the franchise agreement terminates?

Accepted Answer

In no way limiting the above, upon termination, expiration, and/or transfer of this Agreement and/or the Franchised Business, you agree to provide us with all data (in the digital machine-readable format that we specify, and/or printed copies, and/or originals) promptly upon our request.

#### **16. OBLIGATIONS ON TERMINATION OR EXPIRATION**

- **16.1.

Your Obligations.** Upon termination or expiration of this Agreement for any reason, unless we direct you otherwise:

- **16.1.2.** You must stop making any use of the confidential methods, procedures, and techniques associated with the System (including but not limited to the software programs that we provide to you).

You must immediately deliver to us the Manual and all training materials, marketing materials, records, files, forms, instructions, signs, equipment, correspondence, copies, Data, customer contracts and other property in your possession or control that contain confidential information (as defined in Section 12) or that bear the Proprietary Marks and you agree not to retain any unauthorized copies of these materials.

You also must deliver to us all customer information that you have compiled.

- **16.1.3.** You must immediately cease to use, by advertising or in any other manner, the name "Engineering For Kids," all other Proprietary Marks, and all other distinctive forms, slogans, signs, symbols, Web sites, domain names, email addresses, and devices associated with the System.

Source: Item 23 — RECEIPTS (FDD pages 53–138)

Question 62

What happens if an Engineering For Kids franchisee executes a lease modification that affects the franchisor's rights without prior written approval?

Accepted Answer

of travel, lodging, wages, and meals, but not less than \$500. A site is not approved unless you have received our approval in writing.
- 3. **Lease Responsibilities**: If you will obtain the right to occupy the EFK Center Location under a lease, you must deliver a copy of the signed lease or sublease to us within fifteen (15) days of its execution and you may not execute or agree to any modification of the lease or sublease that would affect our rights without our prior written approval of the modification. Unless you obtain our prior written approval to the contrary, your lease (or rider to a lease) must include provisions that will:
- 3.1 Require the lessor to provide us with a copy of any written notice of deficiency under the lease sent to you, at the same time as notice is given to you (as the lessee under the lease), and which grants to us the right (but not obligation) to cure any deficiency by you under the lease within fifteen (15) business days after the expiration of the period in which you had to cure any such default should you fail to do so;
- 3.2 Recognize your right to display and use the Proprietary Marks in accordance with the specifications required by the Manual, subject only to t

Source: Item 22 — CONTRACTS (FDD page 53)

Question 63

What happens if the right to use the Engineering For Kids Principal Mark is challenged?

Accepted Answer

The registration for the following Proprietary Mark is pending. We do not have a federal registration for this Principal Mark. Therefore, the Principal Mark does not have as many legal benefits and rights as a federally registered trademark. If our right to use the Principal Mark is challenged, you may have to change to an alternative trademark, which may increase your expenses.

If it becomes advisable at any time for us and/or you to modify or discontinue using the Mark and/or to use one or more additional or substitute trade or service marks, you must comply with our directions within a reasonable time after receiving notice. We are not required to reimburse you for your direct expenses of changing the Business's signs, for any loss of revenue due to modification or discontinuance of the Mark, or for your expenses of promoting a modified or substitute trademark or service mark.

You must promptly notify us of any unauthorized use of the Proprietary Marks, any challenge to the validity of the Proprietary Marks, or any challenge to our/ LaunchLife USA's ownership of, right to use and to license others to use, or your right to use, the Proprietary Marks. We have the right to direct and control any administrative proceeding or litigation involving the Proprietary Marks, including any settlement. We (directly or through LaunchLife USA) have the right, but not the obligation, to take action against uses by others that may constitute infringement of the Proprietary Marks.

Source: Item 13 — TRADEMARKS (FDD pages 41–42)

Question 64

If Engineering For Kids adopts a computer network record-keeping system, is the franchisee required to input all required information?

Accepted Answer

If we adopt and implement a computer network record-keeping system and/or other technology-related tools to allow you to more effectively manage your Engineering For Kids Franchise, to allow us to have independent and instant on-line access to your records, and/or for other business purposes, you must purchase the required equipment, input all required information related to the new systems or tools, participate as required in any new program, and pay any applicable technology fees charged by us or our designee, to assist in covering costs of the applicable program/system/tools.

Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)

Engineering_For_Kids 2025 FDD FAQ