Is an Engineering For Kids franchisee required to spend more on advertising than the Advertising Obligations?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
l Fund, and/or spend directly on local advertising and promotion, and we may adjust the respective portions from time to time. As of the Effective Date, the Advertising Obligations are allocated as: (a) contributions in the amount of two percent (2.0%) of your Gross Sales to the Brand Fund; and (b) expenditures on local advertising (in accordance with Section 9.5 below) in an amount equal to the greater of two percent (2.0%) of your Gross Sales for that Period (the "Local Ad Percentage Spend") or One Hundred Dollars ($100) (the "Minimum Local Ad Spend").
- 9.2.2. You understand that the Advertising Obligations are the amounts that we may require you to contribute or spend, and that these 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, spend additional amounts on advertising to promote your Franchised Business and the services you offer in your Territory. 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.
9.2.3. For all company-owned or affiliate-owned Engineering For Kids Businesses, we or our affiliates will contribute to the Brand Fund and/or a Regional Fund on the same basis as franchisees; provided, however that moneys that we or our affiliates spend on activities, materials or products to advertise and promote the System and Businesses (which may include costs for the System website, Online Sites, and other on-line advertising (other than advertising primarily targeted toward the sale of franchises)
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, franchisees may need to spend more on advertising than their required Advertising Obligations. While Engineering For Kids specifies the required contributions and expenditures, they acknowledge that these amounts might not always be enough to ensure adequate exposure for the franchise.
Engineering For Kids franchisees have the option to spend additional funds on advertising to further promote their business. However, any extra spending beyond the required Advertising Obligations will not reduce the franchisee's responsibility to contribute to the Brand Fund or any applicable Regional Fund.
During the first three months of operation, Engineering For Kids requires franchisees to conduct an Initial Marketing Campaign with a minimum spend of $2,500. While this initial spend counts towards the general advertising requirements for that period, Engineering For Kids also notes that this amount may not be sufficient and may need to be supplemented with additional advertising expenditures.