When are Engineering For Kids royalty fees and advertising contributions due?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
escribed above.
ITEM 6 OTHER FEES
| Type of Fee (note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty Fees | The greater of: (a) the Applicable Royalty Rate(s) multiplied by the Gross Sales for the Period, or (b) a Minimum Royalty, which will be $300 per month beginning in the 7th month after you sign the Franchise Agreement. See Remarks for the Applicable Royalty Rates. | Payable monthly (at this time) on or before the 5th day of each subsequent Period (note 2) | The "Applicable Royalty Rates" are (note 2): • 7% of Gross Sales between $0 to $25,000 during the Period, • 6% of Gross Sales between $25,000.01 to $50,000 during the Period, and • 5% of Gross Sales in excess of $50,000 during the Period "Gross Sales" means all of your revenue from operating your Franchised Business, but excluding taxes collected from customers and paid to taxing authority, and customer coupon sales (for which customers do not pay for complimentary or reduced price services or product) and refunds. |
| Advertising Obligations (note 3) • Brand Fund • Regional Fund • Local Advertising expenditures | Maximum: 4% of your Gross Sales, plus (if applicable) the amount that your Minimum Local Ad Spend exceeds your Local Ad Percentage Spend for the month. Currently: • Brand Fund: 2%; and | Same as Royalty for contributions to the Brand Fund | We may require you to contribute to a Brand and/or a "Regional Fund" and/or conduct and spend monies on local advertising. We currently require you to make contributions to the Brand Fund and to directly spend monies on local advertising that you conduct. We can change the allocation between the forms of advertising. Please see Note 3 below and the Advertising section in Item 11. |
| Type of Fee (note 1) | Amount | Due Date | Remarks |
|---|---|---|---|
| • Local advertising: the greater of: 2% of the Gross Sales (the "Local Ad Percentage Spend") or $100 per month (the "Minimum Local Ad Spend"). | |||
| Additional Training or Assistance (note 4) | Our then-current standard training fee for initial training (currently $300 per person, subject to change) | At the time of the additional training | Training/assistance fee subject to change. You are responsible for all your costs including transportation, lodging, meals, and personal expenses. |
| Transfer Fee | $5,000 | At the time of transfer | If you want to transfer your Franchise Agreement or ownership, you must pay us this transfer fee. |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, royalty fees and advertising contributions are generally due monthly on or before the 5th day of each subsequent period. The period is defined as a month, unless Engineering For Kids provides written notice that the period will be altered to bi-weekly or weekly. If the 5th day of the month falls on a federal holiday, the due date is shifted to the next business day.
Engineering For Kids requires franchisees to pay royalties and advertising contributions via methods they designate, potentially including electronic funds transfer. Franchisees must ensure sufficient funds are available in their operating account to meet payment requirements if electronic fund transfer is required. Additionally, franchisees must provide Engineering For Kids and their bank with all necessary authorizations to facilitate payments through the specified methods.
It is important to note that franchisees are not permitted to offset, deduct, or withhold any royalty fees, advertising contributions, or other monies payable under the Franchise Agreement based on alleged non-performance by Engineering For Kids. To qualify for reduced royalty rates (less than 7%), franchisees must comply with royalty and brand fund contribution requirements.