What are the franchisee's obligations regarding contributions to the Engineering For Kids Regional Fund?
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. 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 a
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids FDD, the franchisor will specify the portions of the advertising obligation that the franchisee 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 agreement, the advertising obligations are allocated as contributions of 2% of gross sales to the Brand Fund and expenditures on local advertising equal to the greater of 2% of gross sales or $100.
The FDD states that the advertising obligations are the minimum amounts that Engineering For Kids may require the franchisee to contribute or spend. These required amounts may not be sufficient to develop or maintain adequate exposure to the services offered by the franchised business. The franchisee may, in their business judgment, spend additional amounts on advertising to promote their franchised business and the services they offer in their territory.
If a franchisee spends monies on local advertising in excess of the amounts that Engineering For Kids requires as part of the advertising obligations, the additional amounts will not be applied to, or otherwise reduce, their obligations to contribute amounts to the Brand Fund or, if applicable, a Regional Fund for any period. For all company-owned or affiliate-owned Engineering For Kids businesses, Engineering For Kids or its affiliates will contribute to the Brand Fund and/or a Regional Fund on the same basis as franchisees. Monies that Engineering For Kids or its affiliates spend on activities, materials, or products to advertise and promote the system and businesses will be credited towards their contribution obligations.