Licensing games for a client

I’m developing 3 interactive learning modules for an industry membership organisation. They plan to make them free for members, but charge non-members. They will collect and keep all the revenue.

Do they need to sign up for Unreal Engine as a ‘publisher’ and release the learning modules themselves? Or can I sublicense the client so they can distribute them. If so, what sort of contract do I need with my client when it comes to them paying any royalties to Epic Games?

In reality they will never reach the £1m threshold to start paying royalties, but it would be good to get it right this time, so we know for future projects and developments.

Many thanks.

Yes, they do need to sign a license agreement with Epic and to report the release.
Or you can ask Epic for a custom license for this case.