What is the Royalty Rate for Engineering For Kids on Gross Sales between $25,000.01 and $50,000?
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 pr |
Source: Item 6 — OTHER FEES (FDD pages 10–15)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, the royalty fees are structured as a percentage of gross sales, with different rates applying to different sales ranges. For gross sales between $25,000.01 and $50,000 during a period, the royalty rate is 6%. In addition to the percentage-based royalty, Engineering For Kids franchisees must also pay a minimum royalty of $300 per month, starting in the 7th month after signing the Franchise Agreement. The franchisee will pay whichever amount is greater: the applicable royalty rate multiplied by gross sales, or the minimum royalty. Gross sales include all revenue from operating the franchised business, but exclude taxes collected from customers and remitted to taxing authorities, customer coupon sales, and refunds.
For an Engineering For Kids franchisee, this means that if their gross sales in a month are, for example, $30,000, their royalty payment would be 6% of $30,000, which is $1,800. Because $1,800 is greater than the minimum royalty of $300, the franchisee would pay $1,800. However, if a franchisee's gross sales were only $4,000 in a month, the royalty payment would be 7% of $4,000, which is $280. In this case, the franchisee would pay the minimum royalty of $300, as it is greater than the calculated percentage.
It is important to note that to qualify for the reduced royalty rates (those less than 7%), the Engineering For Kids franchisee must be in compliance with their royalty and Brand Fund contribution requirements. The royalty payments are typically due monthly, specifically on or before the 5th day of each subsequent period. The franchisor retains the right to modify the designated period to alternative time frames, including bi-weekly or weekly, with written notice. Franchisees should be aware of these conditions and ensure timely compliance to avoid any penalties or loss of benefits.