When are the contributions to the Brand Fund due for an Engineering For Kids franchise?
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%; and | Same as Royalty for contributions to the Brand Fund | We may require you to contribute to a Brand and/or a "Regional Fund" and/or conduct and spend monies on local advertising. We currently require you to make contributions to the Brand Fund and to directly spend monies on local advertising that you conduct. We can change the allocation between the forms of advertising. Please see Note 3 below an |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, contributions to the Brand Fund are due at the same time as royalty fees. Specifically, these contributions are payable monthly (at the time of the FDD publication) on or before the 5th day of each subsequent period. The 'period' is defined as a month, although Engineering For Kids retains the right to change the designated period to alternative time frames, including bi-weekly or weekly, with written notice.
This means that as an Engineering For Kids franchisee, you must remit your Brand Fund contributions monthly, alongside your royalty fees, by the 5th day of the following month. It is important to note that Engineering For Kids may require these payments to be made via ACH (electronic fund transfer). Therefore, franchisees must ensure they have sufficient funds in their operating account to cover these payments and provide the necessary authorizations for electronic transfers.
Furthermore, the FDD specifies that all fees are non-refundable and must be paid using the payment method designated by Engineering For Kids. Franchisees are not permitted to offset, deduct, or withhold any royalty fees, Advertising Contributions, or other monies payable under the Franchise Agreement, even in cases of alleged nonperformance by Engineering For Kids. This underscores the importance of maintaining timely payments to avoid potential penalties or disruptions to the franchise agreement.
In addition to Brand Fund contributions, Engineering For Kids franchisees may also be required to contribute to a Regional Fund or spend money on local advertising. However, at the time of the FDD, there were no Regional Funds in effect, and the focus was on Brand Fund contributions and local advertising expenditures. The maximum advertising obligation is 4% of gross sales, with the Brand Fund contribution currently set at 2%.