Can Engineering For Kids change the designated 'Period' for royalty payments?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, Engineering For Kids has the right to change the designated period for royalty payments. Initially, a 'Period' is defined as a month. However, Engineering For Kids can modify this to alternative time frames, such as bi-weekly or weekly, by providing written notice to the franchisee.
This change in payment period could impact a franchisee's cash flow management. More frequent payments (bi-weekly or weekly instead of monthly) would require more diligent tracking of gross sales and could potentially strain the franchisee's working capital, especially during slower sales periods. Franchisees need to be prepared to adjust their accounting and financial planning accordingly if Engineering For Kids decides to implement a shorter payment period.
The term 'Month' is defined as a calendar month or another 4-5 week period that Engineering For Kids may periodically designate. This provides Engineering For Kids with some flexibility in defining the monthly period, which could affect when royalty payments are due. Franchisees should clarify with Engineering For Kids how these 4-5 week periods will be determined and communicated to ensure accurate and timely royalty payments.