What section describes how Engineering For Kids administers the System Creative Fund?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
filiate-owned Engineering For Kids Businesses, we or our affiliates will contribute to the Brand Fund and/or a Regional Fund on the same basis as franchisees; provided, however that moneys that we or our affiliates spend on activities, materials or products to advertise and promote the System and Businesses (which may include costs for the System website, Online Sites, and other on-line advertising (other than advertising primarily targeted toward the sale of franchises) will be credited towards our or our affiliates' contribution obligations.
9.3. Brand Fund
- 9.3.1. We have the right, but not the obligation, to establish, maintain and administer a system-wide advertising, marketing, promotional, and brand fund ("Brand Fund", or such other name as we may designate) for the "Engineering For Kids" brand and Businesses. As of the Effective Date, we have a Brand Fund in effect.
- 9.3.2. We have the right to determine the proper operation and other decisions of the Brand Fund. We may use your contributions and any earnings on the Brand Fund for any costs associated with advertising, marketing, public relations, and/or promotional programs and materials, and any other activities we believe would benefit Franchised Businesses generally and the "Engineering For Kids" brand name and System, including advertising campaigns in various media; creation and maintenance of online marketing (including one or more Online Sites, social media/networking and other digital media); direct mail advertising; market research, including secret customers and customer satisfaction surveys; employing advertising and/or public relations agencies; purchasing promotional items; conducting and administering promotions, contests, giveaways, public relations events, community involvement activities, etc.; providing promotional and other marketing materials and services to our franchisees; and on materials and/or services designed to promote the brand and employment opportunities in order to facilitate selection and hiring of qualified staff. We have the right to deduct from the Brand Fund 15% of the monies in the Brand Fund on contributions for administration and management of the Brand Fund. We have the right to direct all marketing programs, with the final decision over creative concepts, materials, and media used in the programs and their placement. We do not guarantee that you will benefit from the Brand Fund in proportion to your contributions to the Brand Fund.
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids FDD, Section 9.3 outlines the administration of the Brand Fund, which appears to be the same as the System Creative Fund. Engineering For Kids has the right, but not the obligation, to establish, maintain, and administer this fund for advertising, marketing, and promotional activities related to the Engineering For Kids brand. As of the FDD's effective date, the Brand Fund is already in effect.
Engineering For Kids retains control over the Brand Fund's operations and decisions. The company can use franchisee contributions and any earnings from the fund to cover costs associated with advertising, marketing, public relations, promotional programs, and other activities that benefit franchisees and the Engineering For Kids brand. These activities may include advertising campaigns, online marketing, direct mail, market research, promotional items, contests, public relations events, and providing marketing materials to franchisees. Engineering For Kids can deduct 15% of the Brand Fund's contributions for administrative and management costs.
The FDD states that Engineering For Kids has the right to direct all marketing programs, including final decisions on creative concepts, materials, and media used. However, Engineering For Kids does not guarantee that franchisees will benefit from the Brand Fund in proportion to their contributions. All contributions to the Brand Fund will be deposited in a separate account and will not be used for Engineering For Kids' general operating expenses, except for reasonable administrative costs related to managing the Brand Fund.
Notably, Section 9.4.5 states that unless otherwise designated in writing when establishing a Regional Fund, Engineering For Kids will administer the Regional Fund in the same manner as described in Section 9.3 regarding the System Creative Fund. This implies that the policies and procedures outlined in Section 9.3 for the Brand Fund also apply to the Regional Fund, providing a consistent approach to fund administration across different levels of marketing efforts.