What are the Applicable Royalty Rates for Engineering For Kids based on Gross Sales?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
ring each Period. You will determine the Applicable Royalty Rate(s) for each Period, and calculate the Royalty due, based on the Gross Sales that you are reporting to us for that Period. To qualify for the reduced Applicable Royalty Rates, you must be in compliance with your Royalty and Brand Fund Contributi
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, the royalty rates are structured on a tiered basis, dependent on the franchisee's gross sales during a specific period. The applicable royalty rates are 7% for gross sales between $0 and $25,000, 6% for gross sales between $25,000.01 and $50,000, and 5% for gross sales above $50,000 during the period.
For a prospective Engineering For Kids franchisee, this means that the amount of royalties paid to the franchisor will fluctuate based on revenue. Lower revenues incur a higher percentage, while higher revenues benefit from a lower percentage. This tiered structure is designed to support new or struggling franchisees with lower sales volumes, while also rewarding successful, high-revenue locations with reduced royalty obligations.
For example, if an Engineering For Kids franchise reports gross sales between $0 and $25,000, the royalty rate is 7%. If gross sales are above $25,000 but less than $50,000, the royalty rate is 7% for the first $25,000 and 6% for the additional gross sales between $25,000.01 and $50,000. This structure incentivizes franchisees to increase their sales, as higher revenues lead to a lower overall percentage paid in royalties.