When are Engineering For Kids franchisees required to submit their Sales Reports?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that the rights granted under this Agreement, including but not limited to the limited territorial grant described in this Section 1, are conditioned upon your compliance with this Agreement. In addition, your Franchised Business must generate a minimum level of Gross Sales (defined in Section 3.2.3 below) on an annual basis for each Operating Year (as defined below), in the amounts set forth in Appendix A (the "Minimum Performance Standards"). For the purposes of the Minimum Performance Standards, your first "Operating Year" will begin on the first day of the Period for which you must submit your first Royalty payment and Sales Report, and will continue for the next reporting periods until the first anniversary of the date on which your first Operating Year began. Each subsequent Operating Year will be the immediately following twelve month period.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids FDD, the franchisee's first Operating Year, for the purposes of Minimum Performance Standards, begins on the first day of the period for which they must submit their first Royalty payment and Sales Report. This Operating Year continues for the subsequent reporting periods until the first anniversary of that date. Each subsequent Operating Year will be the immediately following twelve-month period.
This means that the timing of the initial Sales Report submission is tied to the royalty payment schedule. The FDD does not specify the exact frequency (e.g., monthly, quarterly) for royalty payments or sales report submissions. However, it does state that the start of the franchisee's first operating year is determined by when the first royalty payment and sales report are due.
Prospective franchisees should clarify the specific schedule for royalty payments and sales report submissions with Engineering For Kids during their due diligence. Understanding this schedule is crucial for managing cash flow and meeting the Minimum Performance Standards, which can impact the franchise agreement and territory rights.