When must an Engineering For Kids franchisee pay the Royalty fee?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3.5.1. You expressly acknowledge and agree that your obligation to make full and timely payment of Royalties and Advertising Contributions (and all other amounts provided for in this Agreement) is absolute, unconditional, fully earned, and due upon your generation and receipt of Gross Sales.
- 3.5.2. You agree that you will not, for any reason, delay or withhold the payment of all or any part of those or any other payments due hereunder, put payments in escrow or set-off same against any claims or alleged claims you may allege against us or others. You also agree that you will not, on grounds of any alleged non-performance by us or others, withhold payment of any fee, including without limitation Royalty fees or Advertising Contributions, nor withhold or delay submission of any reports due hereunder including but not limited to Sales Reports.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, franchisees must make full and timely payments of royalties. This obligation is absolute, unconditional, fully earned, and due upon the generation and receipt of gross sales. This means that as soon as an Engineering For Kids franchisee generates revenue, the royalty payment obligation is triggered.
The agreement explicitly prohibits franchisees from delaying or withholding royalty payments for any reason. Franchisees cannot put payments in escrow or offset them against any claims they may have against Engineering For Kids. Even if a franchisee alleges non-performance by Engineering For Kids, they are still obligated to pay the royalty fees and submit sales reports on time. This underscores the importance of maintaining consistent cash flow and financial planning for prospective franchisees.
In addition to the royalty fee, Engineering For Kids franchisees must also pay a Technology Fee. As of the agreement date, this fee is $200 per month, and Engineering For Kids retains the right to increase it, but not by more than $25 in any 12-month period. The Technology Fee is due at the same time and in the same manner as the royalty fee, unless Engineering For Kids specifies otherwise in writing. This fee is used at the discretion of Engineering For Kids, potentially for services from third-party providers or for developing and licensing technology.