What is the definition of 'Minimum Local Ad Spend' for an Engineering For Kids franchise?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
the Advertising section in Item 11. |
| Type of Fee (note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| • Local advertising: the greater of: 2% of the Gross Sales (the "Local Ad Percentage Spend") or $100 per month (the "Minimum Local Ad Spe |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, the minimum local ad spend is defined within the context of advertising obligations. Engineering For Kids franchisees are required to spend on local advertising, and the minimum amount they must spend is $100 per month, or 2% of gross sales, whichever is greater. This is referred to as the 'Minimum Local Ad Spend'.
This requirement means that even if a franchisee's gross sales are low, they must still invest at least $100 in local advertising efforts each month. Conversely, if a franchisee's gross sales are high enough that 2% of their gross sales exceeds $100, they must spend that higher amount on local advertising. For example, if a franchisee has gross sales of $6,000 in a month, they would need to spend $120 (2% of $6,000) on local advertising, as this is greater than the $100 minimum.
This policy ensures that all Engineering For Kids franchisees are actively promoting their business within their local market, regardless of their current revenue. It also allows for the advertising spend to scale with the franchisee's success, as higher revenues will necessitate a higher advertising spend. Franchisees should factor this ongoing advertising expense into their financial projections and business planning.