Is there a limit on Engineering For Kids' right to assign the Franchise Agreement?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in | Summary * | |
|---|---|---|---|
| Franchise or other Agreement | |||
| c Requirements for you to renew or extend | 2.2 | Notice, satisfaction of monetary obligations, compliance with Franchise Agreement, not in material default, release, sign then-current form of Franchise Agreement (which may contain materially different terms and conditions than the original agreement), pay a renewal fee, and others; please refer to §§ 2.2.1 –2.2.7 in the Franchise Agreement. | |
| d Termination by you | Not applicable | Subject to state law, you may not terminate the Franchise Agreement. | |
| e Termination by us | Not applicable | ||
| without cause | |||
| f Termination by us with cause | 15 | Default under agreement, bankruptcy, abandonment, and other grounds; see § 15 of the Franchise Agreement. (Under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing.) | |
| g “Cause” defined – | 15.3 | All other defaults not specified in §§ 15.1 and | |
| curable defaults | 15.2 of the Franchise Agreement | ||
| h “Cause” defined – non-curable defaults | 15.1 and 15.2 | Bankruptcy, abandonment, conviction of felony, and others (but under the U.S. Bankruptcy Code, 11 U.S.C. § 101, et seq., we may be unable to terminate the agreement merely because you make a bankruptcy filing). | |
| i Your obligations on termination/ nonrenewal | 16 | Immediately stop operating the Franchised Business, stop all use of our trademarks, pay all amounts due, pay liquidated damages if termination was due to your default, and others; see §§ 16.1.1 – 16.1.4 of the Franchise Agreement. | |
| j Assignment of | 13 | There are no limits on our right to assign the | |
| contract by us | Franchise Agreement. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 45–48)
What This Means (2025 FDD)
According to Engineering For Kids' 2025 Franchise Disclosure Document, there are no limits on the company's right to assign the Franchise Agreement. This means that Engineering For Kids has the unrestricted ability to transfer its rights and obligations under the agreement to another party without needing the franchisee's consent or meeting specific conditions.
For a prospective Engineering For Kids franchisee, this lack of restriction on assignment could have significant implications. If Engineering For Kids were to be acquired by or merge with another company, the new entity would automatically assume the franchisor's role. While this may not always be detrimental, it introduces uncertainty, as the new franchisor might have different business philosophies, management styles, or strategic priorities that could affect the franchisee's operations and support.
It is important for potential Engineering For Kids franchisees to consider this lack of limitations on assignment as they evaluate the franchise opportunity. While the current management and support systems may be appealing, there is no guarantee that these will remain the same if the Franchise Agreement is assigned to a new entity. Therefore, prospective franchisees should carefully assess the long-term stability and potential for change within the Engineering For Kids franchise system.