What is the Royalty Rate for Engineering For Kids on Gross Sales exceeding $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 based on gross sales during a period. The 'Applicable Royalty Rates' are tiered: 7% of Gross Sales between $0 to $25,000, 6% of Gross Sales between $25,000.01 to $50,000, and 5% of Gross Sales in excess of $50,000 during the period.
In practical terms, this means that if an Engineering For Kids franchisee generates more than $50,000 in gross sales during a month, they will pay a 5% royalty on the amount exceeding that threshold. For example, if a franchisee has $60,000 in gross sales, they would pay 5% of the $10,000 overage. This tiered structure incentivizes higher sales volumes, as the percentage paid decreases as revenue increases.
In addition to the percentage-based royalty, Engineering For Kids franchisees must also pay a minimum royalty of $300 per month, starting in the seventh month after signing the Franchise Agreement. The franchisee pays whichever amount is greater: the applicable royalty rate multiplied by gross sales, or the $300 minimum royalty. The royalty fees are payable monthly, specifically on or before the 5th day of each subsequent period. The FDD specifies that royalty payments and advertising contributions must be paid by the 5th day of each period, and the amounts will be based on the Gross Sales for the prior Period.