What is the Engineering For Kids franchisee's obligation regarding local advertising expenditures?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
ion 9.4 below); and/or (c) spend amounts on local advertising (as described in Section 9.5 below) in such amounts as we designate under Section 9.2.1 below, provided that the amounts that we require will not, in the aggregate, exceed an amount equal to (i) four percent (4%) of the Gross Sales of the Franchised Business during the preceding Period, plus (if applicable) (ii) the amount by which the Minimum Local Ad Spend (as defined below) exceeds your then-current Local Ad Percentage Spend (as defined below) for the Period (the "Advertising Obligation").
- 9.2.1. We will specify the respective portions of the Advertising Obligation that you must contribute to the Brand Fund, contribute to any Regional 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.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, franchisees are obligated to contribute to advertising. Engineering For Kids specifies the portions of the advertising obligation that franchisees must contribute to the Brand Fund, any Regional Fund, and/or spend directly on local advertising and promotion. These portions may be adjusted from time to time by Engineering For Kids.
As of the effective date of the franchise agreement, franchisees must contribute two percent (2.0%) of their gross sales to the Brand Fund. Additionally, franchisees must spend on local advertising an amount equal to the greater of two percent (2.0%) of their gross sales for that period (the Local Ad Percentage Spend) or One Hundred Dollars ($100) (the Minimum Local Ad Spend). These local marketing expenditures must be made on a monthly basis, starting on the Opening Date and continuing during the agreement.
Engineering For Kids may request appropriate documentation to verify compliance with the minimum spending obligation. They also have the right to periodically designate in the Manual the types of expenditures that will or will not count toward the minimum annual spending requirement. Franchisees must advertise the Franchised Business online directories or online user guides, as specified in the Manual or other written instructions. If franchisees advertise jointly with other franchisees, their share of the cost will count toward their local spending requirement.