How are the contribution amounts to the Engineering For Kids Brand Fund determined?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
l of the Advertising Obligations are allocated between the three components.
Currently, the Advertising Obligations are allocated so that you must (1) contribute 2% of your Gross Sales to the Brand Fund, and (2) spend on local advertising an amount equal to the greater of 2% of your Gross Sales (the "Local Ad Percentage Spend") or $100 per month (the "Minimum Local Ad Spend"). The Local Ad Percentage Spend (or if applicable the Minimum Local Ad Spend) is the amount that we require you to spend on local efforts that you conduct, but you may choose to spend more on local advertising, and any additional amounts that you spend will not count towards your requirement to contribute to the Brand Fund. At this time, there are no Regional Funds. When we change the Advertising Obligations, we give you reasonable written notice to you, and your total Advertising Obligations (whether as contributions and/or expenditures) will not exceed 3% of your Gross Sales (plus, if applicable, the amount by which the Minimum Local Ad Spend exceeds your then-current Local Ad Percentage Spend for that month). The Advertising Obligations are the amounts that we may require you to contribute or spend on advertising. The required amounts may not be sufficient in all cases to develop or maintain adequate exposure to the services offered by your Franchised Business. You may, in your business judgment, choose to spend additional amounts on advertising to promote your Franchised Business and the services you offer in your Territory, so long as your advertising activities are in compliance with the Franchise Agreement. If you spend monies on local advertising in excess of the amounts that we require as part of the Advertising Obligations, the additional amounts will not be applied to, or otherwise reduce, your obligations to contribute amounts to the Brand Fund or, if applicable, a Regional Fund for any Period. We are not
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, franchisees are currently required to contribute 2% of their gross sales to the Brand Fund. In addition to this, franchisees must spend on local advertising an amount equal to the greater of 2% of their gross sales (referred to as the "Local Ad Percentage Spend") or $100 per month (referred to as the "Minimum Local Ad Spend").
Engineering For Kids may change these advertising obligations, but the total advertising obligations, whether contributions or expenditures, will not exceed 3% of gross sales. There is an exception to this, which is if the Minimum Local Ad Spend exceeds the franchisee's current Local Ad Percentage Spend for that month, the franchisee will be responsible for the difference. The amount that Engineering For Kids requires franchisees to spend on advertising may not be sufficient to develop or maintain adequate exposure for the services offered by the franchised business.
Franchisees can choose to spend additional amounts on local advertising to promote their Engineering For Kids franchise, as long as their advertising activities comply with the Franchise Agreement. However, any additional amounts spent on local advertising beyond what is required will not reduce the franchisee's obligations to contribute to the Brand Fund or a Regional Fund, if applicable. Engineering For Kids is not required to spend advertising monies in any specific area.