What is the 'Sales Report' for an Engineering For Kids franchise, and when is it due?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
on that these businesses in multiple locations are deemed of strategic importance to us. We will have the right to negotiate the terms and conditions of all Programs to be conducted at Large Accounts, in accordance with the terms of Section 6.9 below.
1.4. Performance Criteria
You acknowledge and agree that the rights granted under this Agreement, including but not limited to the limited territorial grant described in this Section 1, are conditioned upon your compliance with this Agreement. In addition, your Franchised Business must generate a minimum level of Gross Sales (defined in Section 3.2.3 below) on an annual basis for each Operating Year (as defined below), in the amounts set forth in Appendix A (the "Minimum Performance Standards"). For the purposes of the Minimum Performance Standards, your first "Operating Year" will begin on the first day of the Period for which you must submit your first Royalty payment and Sales Report, and will continue for the next reporting periods until the first anniversary of the date on which your first Operating Year began. Each subsequent Operating Year will be the immediately following twelve month period. If you fail to satisfy the Minimum Performance Standards, then we may take any one or more of the following actions:
- 1.4.1. Reduce the size of your Territory; and/or
- 1.4.2. Permit other franchisees, or us or our affiliates, to provide conduct Programs and Special Event Services at locations within your Territory; and/or
- 1.4.3. Establish, or license or franchise others to establish, Engineering For Kids Business in your Territory; and/or
1.4.4. Terminate this Agreement pursuant to Sections 15.2.16 (which provides an opportunity to cure with respect to a failure to satisfy the Minimum Performance Standard for your first Operating Year (as defined in Appendix A) and 15.2.17.
2. TERM; SUCCESSOR FRANCHISE AGREEMENTS
2.1. Term
This Agreement expires five (5) years from the Agreement Date, unless it is terminated sooner as provided in other sections of this Agreement.
**2.2.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids FDD, the franchise agreement stipulates that the rights granted to a franchisee, including territorial rights, are contingent upon compliance with the agreement, including meeting minimum gross sales standards annually. The franchisee's first operating year, for the purpose of these standards, begins on the first day of the period for which the franchisee must submit their first royalty payment and sales report. This operating year continues until the first anniversary of that date, with subsequent years following the same twelve-month period.
Failure to meet these minimum performance standards can result in several actions by Engineering For Kids, including reducing the franchisee's territory size, allowing other franchisees or the franchisor to operate within the territory, establishing additional Engineering For Kids businesses in the territory, or even terminating the franchise agreement. The agreement allows for a cure period for failing to meet the minimum sales standards during the first operating year.
Furthermore, the FDD states that submitting any report or statement known to be false or misleading, or underreporting gross sales by more than 2% on three or more occasions in any eighteen-month period, or by 5% or more for any period of one month or greater, can lead to termination of the franchise agreement. This underscores the importance of accurate and timely sales reporting for Engineering For Kids franchisees. The specific content requirements for the 'Sales Report' are not detailed in the provided excerpts, but it is clear that it is tied to royalty payments and performance evaluations.