What happens if assets or equipment of an Engineering For Kids franchise are repossessed?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
In order to maintain the continuity of operation of the Franchised Business and to preserve the integrity of the System, you agree to permit us to enter the premises of the Franchised Business and to operate and manage the Franchised Business ("Management" or "Manage") upon the occurrence of any of the following circumstances: (a) if you abandon or fail, or threaten to abandon or fail, to actively operate the Franchised Business for five (5) or more consecutive days unless otherwise authorized by us; (b) if you fail to operate the Franchised Business as required, or if you intend to close or notify any participants of your intent to close the Franchised Business, (c) if in our reasonable judgment the Franchised Business is in imminent risk of closure due to your financial condition or otherwise; (d) if you fail to complete scheduled Programs or services for clients or participants; (e) if any assets or equipment used in and required for the proper operation of the Franchised Business are repossessed or confiscated by appropriate authorities; and/or (f) upon the death or permanent disability of the you, the Operating Principal, or an Owner of a controlling interest in you that results, in our opinion, in your diminished capacity to properly operate the Franchised Business. We will use reasonable commercial efforts to provide notice to you before exercising our rights under this Section 6.15, but we may enter the premises of the Franchised Business and
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, if any assets or equipment used in and required for the proper operation of the franchised business are repossessed or confiscated by appropriate authorities, Engineering For Kids has the right to enter the premises of the franchised business and operate and manage the business.
This action is taken by Engineering For Kids to maintain the continuity of operation of the franchised business and to preserve the integrity of the system. Before exercising this right, Engineering For Kids will make reasonable commercial efforts to provide notice to the franchisee.
This clause in the franchise agreement protects the Engineering For Kids brand and ensures that a struggling franchise does not negatively impact the entire system. It also provides a safety net, albeit a potentially intrusive one, for franchisees who may be facing severe financial difficulties. The franchisee should clarify with Engineering For Kids what specific criteria or procedures are used to determine 'proper operation' and what recourse they have if they disagree with the franchisor's assessment.