Besides the Brand Fund, what other advertising expenditures might Engineering For Kids require?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
escribed above.
ITEM 6 OTHER FEES
| Type of Fee (note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fees | The greater of: (a) the Applicable Royalty Rate(s) multiplied by the Gross Sales for the Period, or (b) a Minimum Royalty, which will be $300 per month beginning in the 7th month after you sign the Franchise Agreement. See Remarks for the Applicable Royalty Rates. | Payable monthly (at this time) on or before the 5th day of each subsequent Period (note 2) | The "Applicable Royalty Rates" are (note 2): • 7% of Gross Sales between $0 to $25,000 during the Period, • 6% of Gross Sales between $25,000.01 to $50,000 during the Period, and • 5% of Gross Sales in excess of $50,000 during the Period "Gross Sales" means all of your revenue from operating your Franchised Business, but excluding taxes collected from customers and paid to taxing authority, and customer coupon sales (for which customers do not pay for complimentary or reduced price services or product) and refunds. |
| Advertising Obligations (note 3) • Brand Fund • Regional Fund • Local Advertising expenditures | Maximum: 4% of your Gross Sales, plus (if applicable) the amount that your Minimum Local Ad Spend exceeds your Local Ad Percentage Spend for the month. Currently: • Brand Fund: 2%; |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, franchisees may be required to contribute to a Regional Fund and/or spend money on local advertising in addition to the Brand Fund. The maximum advertising obligation that Engineering For Kids can impose is 4% of gross sales. Currently, Engineering For Kids requires a 2% contribution to the Brand Fund.
Engineering For Kids can change the allocation between the forms of advertising, meaning they could increase the contribution to the Brand Fund, implement a Regional Fund, or require increased spending on local advertising. Franchisees must also spend a minimum amount on local advertising, which is the greater of 2% of gross sales (the "Local Ad Percentage Spend") or $100 per month (the "Minimum Local Ad Spend").
This means that even if a franchisee's gross sales are low, they are still obligated to spend at least $100 per month on local advertising. Prospective franchisees should consider these advertising obligations when evaluating the overall cost of operating an Engineering For Kids franchise. It is important to note that Engineering For Kids has the ability to modify these advertising requirements, so franchisees should stay informed of any changes.