Does Engineering For Kids recognize the value of advertising?
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 all company-owned or affiliate-owned Engineering For Kids Businesses, we or our affiliates will contribute to the Brand Fund and/or a Regional Fund on the same basis as franchisees; provided, however that moneys that we or our affiliates spend on activities, materials or products to advertise and promote the System and Businesses (which may include costs for the System website, Online Sites, and other on-line advertising (other than advertising primarily targeted toward the sale of franchises) will be credited towards our or our affiliates' contribution obligations.
9.3. Brand Fund
- 9.3.1. We have the right, but not the obligation, to establish, maintain and administer a system-wide advertising, marketing, promotional, and brand fund ("Brand Fund", or such other name as we may designate) for the "Engineering For Kids" brand and Businesses. As of the Effective Date, we have a Brand Fund in effect.
- 9.3.2. We have the right to determine the proper operation and other decisions of the Brand Fund. We may use your contributions and any earnings on the Brand Fund for any costs associated with advertising, marketing, public relations, and/or promotional programs and materials, and any other activities we believe would benefit Franchised Businesses generally and the "Engineering For Kids" brand name and System, including advertising campaigns in various media; creation and maintenance of online marketing (including one or more Online Sites, social media/networking and other digital media); direct mail advertising; market research, including secret customers and customer satisfaction surveys; employing advertising and/or public relations agencies; purchasing promotional items; conducting and administering promotions, contests, giveaways, public relations events, community involvement activities, etc.; providing promotional and other marketing materials and services to our franchisees; and on materials and/or services designed to promote the brand and employment opportunities in order to facilitate selection and hiring of qualified staff. We have the right to deduct from the Brand Fund 15% of the monies in the Brand Fund on contributions for administration and management of the Brand Fund. We have the right to direct all marketing programs, with the final decision over creative concepts, materials, and media used in the programs and their placement. We do not guarantee that you will benefit from the Brand Fund in proportion to your contributions to the Brand Fund.
- 9.3.3. We will deposit all contributions to the Brand Fund in an account separate from our other funds and will not use them to defray any of our general operating expenses, except for reasonable administrative costs and overhead we incur in activities reasonably related to the administration of the Brand Fund or the management of Brand Fund-supported programs (including full or partial salaries of our personnel who devote full- or part-time services to Brand Fund activities).
- 9.3.4. We will make available to you, at a reasonable cost, any promotional materials produced with Brand Fund monies, and we will deposit the proceeds of those sales into the Brand Fund account. We are not required to have an independent audit of the Brand Fund completed. We will make available an unaudited statement of contributions and expenditures for the Brand Fund ninety (90) days after the close of our fiscal year to franchisees that make a written request for a copy.
9.4. Regional Fund.
We have the right to designate any geographical area for purposes of establishing a regional marketing fund ("Regional Fund"). If we have established a Regional Fund for the geographic area in which your Franchised Business is located by the time you commence operations hereunder, you must immediately become a member of such Regional Fund. If we establish a Regional Fund for the geographic area in which your Franchised Business is located the Term of this Agreement, you must become a member of such Regional Fund within thirty (30) days after the date on which the Regional Fund commences operation. In no event will you be required to be a member of more than one Regional Fund. The following provisions will apply to each such Regional Fund:
9.4.1. Each Regional Fund will be organized and governed in a form and manner, and will commence operations on a date, that we have approved in advance in writing.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, the brand acknowledges the importance of advertising and marketing, as evidenced by the establishment of a Brand Fund and the requirement for franchisees to participate in marketing efforts. Engineering For Kids has the right, but not the obligation, to maintain a system-wide advertising, marketing, promotional, and brand fund for the Engineering For Kids brand and Businesses. As of the Effective Date, they have a Brand Fund in effect.
The Brand Fund is used for various advertising and promotional activities, including advertising campaigns, online marketing, direct mail, market research, and public relations. Engineering For Kids has the right to direct all marketing programs and make final decisions on creative concepts and media. Franchisees are required to contribute to the Brand Fund, with the franchisor specifying the portions to be contributed to the Brand Fund, Regional Fund, or spent on local advertising. As of the Effective Date, franchisees must contribute two percent of gross sales to the Brand Fund and spend at least two percent of gross sales or $100 on local advertising.
New Engineering For Kids franchisees must also conduct an initial marketing campaign during their first three months of operation, spending at least $2,500. This initial campaign requires the franchisor's prior written approval. However, Engineering For Kids does not guarantee that franchisees will directly benefit from the Brand Fund in proportion to their contributions.
These stipulations highlight that Engineering For Kids places a significant emphasis on both national brand building and local marketing efforts. The advertising obligations and initial marketing campaign requirements ensure that franchisees actively participate in promoting their businesses and the Engineering For Kids brand. However, franchisees should recognize that the required advertising expenditures may not always be sufficient to guarantee success and that additional investment may be necessary.