Can Engineering For Kids charge suppliers a fee based on Engineering For Kids franchisee purchases?

According to Engineering For Kids' 2025 Franchise Disclosure Document, Engineering For Kids reserves the right to collect rebates, credits, and other benefits from suppliers based on franchisee purchases. Engineering For Kids may also charge suppliers a fee, either as a percentage of franchisee purchases or as a flat fee. These fees would compensate Engineering For Kids for negotiating and maintaining purchasing arrangements with the suppliers. However, the document states that Engineering For Kids does not currently have any such arrangements in effect.

This means that while Engineering For Kids isn't currently taking a cut from supplier transactions, the franchise agreement allows them to do so in the future. This is a fairly common practice in franchising, where the franchisor leverages the collective buying power of its franchisees to negotiate better deals with suppliers and may receive compensation for doing so.

For a prospective Engineering For Kids franchisee, this implies that the cost of goods and services could potentially be affected by these arrangements. While Engineering For Kids states that these payments would compensate them for negotiating and maintaining purchasing arrangements, it's important for franchisees to understand how these fees might impact their bottom line. It would be prudent to inquire with Engineering For Kids about the specifics of any potential or future supplier fee arrangements, including how the fees are determined, how they might affect pricing, and how the franchisor ensures that these arrangements benefit the franchisees as well as the franchisor.