When are the royalty fees due for an Engineering For Kids franchise?
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. |
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 are due monthly, specifically on or before the 5th day of each subsequent period. The term 'period' is defined as a month, although Engineering For Kids retains the right to change the designated period to alternative time frames, including bi-weekly or weekly, provided they give written notice.
Engineering For Kids requires franchisees to pay the greater of either a percentage of gross sales, known as the Applicable Royalty Rate, or a Minimum Royalty. The Minimum Royalty is $300 per month, but this requirement is waived for the first six months after the Franchise Agreement is signed. The Applicable Royalty Rates are 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.
Engineering For Kids also requires that franchisees use a payment method they designate, which may include electronic funds transfer. To qualify for reduced Applicable Royalty Rates (those less than 7%), franchisees must comply with their Royalty and Brand Fund Contribution requirements. Additionally, franchisees are not allowed to deduct or withhold any royalty fees due to alleged nonperformance by Engineering For Kids.