Are there any restrictions on how Engineering For Kids can spend advertising contributions?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
and administer the Brand Fund as follows. (Franchise Agreement, Section 9.3).
During any periods that the Brand Fund is in effect, you must contribute the amounts that we specify to the Brand Fund as described in the first paragraph above under "Ongoing Advertising". We may use your contributions and any earnings on the Brand Fund for any costs associated with local, regional, and/or national advertising, marketing, public relations, and/or promotional programs and materials, and any other activities we believe would benefit Franchised Businesses and "Engineering For Kids" brand and the System generally, including advertising campaigns in various media; creation and maintenance of online marketing (including one or more websites or other Online Sites (as defined below), social media/networking and other digital media); direct mail advertising; market research and testing, 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 development of, or producing for franchisees, materials and items used in the Businesses for customer viewing and use; 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. The Brand Fund contributions may be used for national, regional and/or local advertising activities and may take place in a variety of media (including television, radio, and print).
We will deposit all contributions to the Brand Fund in an account separate from our other funds and will not use them to defray any of our general operating expenses, except for reasonable administrative costs and overhead we incur in activities reasonably related to the administration of the Brand Fund or the management of Brand Fund-supported programs (including full or partial salaries of our personnel who devote full- or part-time to Brand Fund activities). Additionally, we may charge the Brand Fund fees at reasonable market rates for advertising, marketing, and promotional services that we ourselves actually provide in lieu of engaging third-party agencies to provide such services.
We may make, or refrain from making, any expenditures for advertising and promotional activities. In any calendar year, we may spend more or less than that year's aggregate Advertising Contributions to the Brand Fund. We may have the Brand Fund borrow from us or other lenders to cover any Brand Fund deficits. We may have the Brand Fund invest any surplus for the Brand Fund's future use.
We control the concepts and materials and all other matters relating to advertising, public relations, marketing, market research, and promotional campaigns.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 25–36)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, there are specific guidelines and restrictions regarding how the company can utilize advertising contributions. Engineering For Kids may use franchisee contributions and any earnings on the Brand Fund for costs associated with local, regional, and/or national advertising, marketing, public relations, and/or promotional programs and materials. These activities are intended to benefit Franchised Businesses and the Engineering For Kids brand and the System generally.
Engineering For Kids details a variety of potential advertising avenues, including advertising campaigns in various media, online marketing, social media, direct mail, market research, promotional items, contests, public relations events, and providing promotional materials to franchisees. The company has the right to deduct 15% of the Brand Fund monies for administration and management of the Brand Fund. All contributions to the Brand Fund will be kept in a separate account and will not be used for general operating expenses, except for reasonable administrative costs related to the Brand Fund.
Furthermore, the Brand Fund will not be used for advertising that primarily solicits the sale of franchises. While Engineering For Kids has broad discretion in how the Brand Fund is spent, these restrictions provide some assurance to franchisees that their contributions will be used for the benefit of the system, rather than for the general operating expenses of the franchisor or for franchise sales. During the last fiscal year, the Brand Fund expenditures were allocated with 70% spent on marketing promotional content and marketing support, 20% on digital assets, and 10% on the website.