What is the Royalty Rate for Engineering For Kids on Gross Sales between $0 and $25,000?
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 |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, the royalty fee is calculated based on a percentage of gross sales. For gross sales between $0 and $25,000 during a specific period, the royalty rate is 7%. However, Engineering For Kids franchisees also need to pay a minimum royalty fee.
Beginning in the seventh month after signing the Franchise Agreement, the minimum royalty is $300 per month. Franchisees will pay whichever amount is greater: 7% of gross sales or the $300 minimum. To qualify for royalty rates less than 7%, franchisees must comply with their Royalty and Brand Fund Contribution requirements.
In practical terms, if an Engineering For Kids franchisee generates $10,000 in gross sales in a month, the royalty would be 7% of that amount, which is $700. Since $700 is greater than the minimum royalty of $300, the franchisee would pay $700. However, if an Engineering For Kids franchisee generates only $2,000 in gross sales, 7% of that amount would be $140. In this case, the franchisee would pay the minimum royalty of $300 instead of $140. This minimum royalty ensures that Engineering For Kids receives a baseline income from each franchise, regardless of sales volume.