Can Engineering For Kids earn money from suppliers based on franchisee purchases?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
6.3.3. We may enter into arrangements with manufacturers of program supplies and materials as well as equipment (together "Products") to make those Products available to Engineering For Kids Businesses at favorable prices and other terms. If so, we will use our best efforts to maintain purchasing arrangements for Products throughout the term of this Agreement, although we do not represent or guarantee that Products will be available on any specific terms. In order for us to negotiate favorable arrangements with suppliers of Products, it is beneficial for all Engineering For Kids Businesses to combine their purchasing power. Accordingly, except as provided below, you must purchase all of your requirements of Products from the suppliers with whom we have established purchasing programs for Engineering For Kids Businesses. You agree to purchase Products solely for the operation of your Franchised Business and conducting Programs and not for use in any other business or resale or redistribution to any other party. Subject to applicable law, we may earn money from the suppliers based on your purchases in the form of rebates, commissions, or other payments. You acknowledge that these payments compensate us for the cost of negotiating and maintaining the purchasing arrangements with the suppliers and that, subject to applicable laws, we have no obligation to remit the funds to you.
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 may enter into arrangements with manufacturers of program supplies, materials, and equipment, referred to as "Products", to make these Products available to franchisees at favorable prices.
To facilitate these arrangements, Engineering For Kids requires franchisees to purchase all their Products from suppliers with whom they have established purchasing programs, except as otherwise provided. Franchisees must purchase Products solely for operating their franchised business and conducting Programs, and not for resale or redistribution.
Subject to applicable law, Engineering For Kids may earn money from these suppliers based on franchisee purchases in the form of rebates, commissions, or other payments. The FDD states that these payments compensate Engineering For Kids for the cost of negotiating and maintaining the purchasing arrangements with the suppliers, and that, subject to applicable laws, Engineering For Kids has no obligation to remit these funds to the franchisee.