What are the three potential components of the Advertising Obligation for an Engineering For Kids franchise?
Engineering_For_Kids Franchise · 2025 FDDAnswer from 2025 FDD Document
ion 9.4 below); and/or (c) spend amounts on local advertising (as described in Section 9.5 below) in such amounts as we designate under Section 9.2.1 below, provided that the amounts that we require will not, in the aggregate, exceed an amount equal to (i) four percent (4%) of the Gross Sales of the Franchised Business during the preceding Period, plus (if applicable) (ii) the amount by which the Minimum Local Ad Spend (as defined below) exceeds your then-current Local Ad Percentage Spend (as defined below) for the Period (the "Advertising Obligation").
- 9.2.1. We will specify the respective portions of the Advertising Obligation that you must contribute to the Brand Fund, contribute to any Regional Fund, and/or spend directly on local advertising and promotion, and we may adjust the respective portions from time to time. As of the Effective Date, the Advertising Obligations are allocated as: (a) contributions in the amount of two percent (2.0%) of your Gross Sales to the Brand Fund;
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to the 2025 Engineering For Kids Franchise Disclosure Document, the advertising obligations for franchisees consist of contributions to the Brand Fund, expenditures on local advertising, and participation in special promotions.
The first component is a contribution to the Brand Fund. Engineering For Kids specifies that franchisees must contribute two percent (2.0%) of their gross sales to the Brand Fund. These funds are used for system-wide advertising, marketing, and promotional activities that benefit all franchisees.
The second component involves local advertising expenditures. Franchisees are required to spend on local advertising an amount equal to the greater of two percent (2.0%) of their gross sales or $100. This local advertising must be conducted in accordance with the guidelines provided by Engineering For Kids.
Finally, Engineering For Kids franchisees must participate in special promotional activities that Engineering For Kids may prescribe from time to time for Engineering For Kids Businesses generally or in specific geographic areas or for specific types of venues. Franchisees are responsible for covering their own costs for local participation in these promotions.