What happens if assets or equipment are repossessed from an Engineering For Kids franchise?
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 must agree under the Franchise Agreement that if we request it, you will 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 or more consecutive days unless otherwise authorized by us; (b) if you fail to keep the Franchised Business open as required, or if you intend to close or notify any customers 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 (f) upon the death or permanent disability of you, the Operating Principal, or an Owner of a controlling interest in you resulting, in our opinion, in your diminished capacity to properly operate the Franchised Business.
If we chose to exercise this right, we will use reasonable commercial efforts to provide notice to you before exercising our rights to Manage, but we may enter the premises of the Franchised Business and commence Management even if you have not received or responded to a notice.
We will have the right to manage the Franchised Business and to be compensated from the Gross Sales of the Franchised Business for all of our costs and expenses in conducting this Management.
Our right to Manage the Franchised Business will be in addition to, and not instead of, all other rights available to us under the Franchise Agreement (including the right, if applicable, to terminate the Franchise Agreement).
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids 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 and operate and manage the franchised business. This is to maintain the continuity of operation and preserve the integrity of the Engineering For Kids system.
Engineering For Kids will be compensated from the gross sales of the franchised business for all of their costs and expenses in conducting this management. The FDD states that Engineering For Kids will use reasonable commercial efforts to provide notice to the franchisee before exercising their rights to manage the business. However, Engineering For Kids can enter the premises and commence management even if the franchisee has not received or responded to a notice.
The right to manage the Engineering For Kids franchised business is in addition to, and not instead of, all other rights available to Engineering For Kids under the Franchise Agreement, including the right to terminate the Franchise Agreement. This means that repossession of assets could lead to Engineering For Kids taking over the business temporarily and potentially terminating the franchise agreement, depending on the circumstances.