What are the two components of the Advertising Obligations for an Engineering For Kids franchisee?
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; and (b) expenditures on local advertising (in accordance with Section 9.5 below) in an amount equal to the greater of two percent (2.0%) of your Gross Sales for that Period (the "Local Ad Percentage Spend") or One Hundred Dollars ($100) (the "Minimum Local Ad Spend").
- 9.2.2. You understand that the Advertising Obligations are the amounts that we may require you to contribute or spend, and that these required amounts may not be suff
Source: Item 23 — RECEIPTS (FDD pages 53–138)
What This Means (2025 FDD)
According to Engineering For Kids's 2025 Franchise Disclosure Document, franchisees have two advertising obligations. First, they must contribute two percent (2.0%) of their gross sales to the Brand Fund. Second, franchisees must spend money on local advertising.
The amount spent on local advertising must be equal to the greater of two percent (2.0%) of the franchisee's gross sales for that period or $100. This ensures that even franchisees with lower gross sales still contribute a minimum amount to local advertising efforts.
Engineering For Kids retains the right to adjust the portions allocated to the Brand Fund, Regional Fund, and local advertising. Franchisees are also allowed to spend more than the required amount on advertising, but these additional expenses do not offset their Brand Fund or Regional Fund obligations.