Can the company designate a more frequent payment schedule for the Best Brains Royalty Fee?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
TX 78711 | |### EXHIBIT B
| Number of students enrolled in your Center | Monthly Fee | |---|---| | 0-100 students | $40 | | 101-200 students | $60 | | 200+ students | $80 | FRANCHISE NUMBER _________________
TABLE OF CONTENTS
| Fee | Amount | |
|---|---|---|
| E-Training Certification | $375 to be equipped to offer e-learning; $75 for each additional course required | |
| Subject Material Fee | $5 per subject per month for the availability and distribution of e-learning material | |
| Teaching Time | If we reasonably feel that you are not meeting our quality standards for E-Learning, we reserve the right to take over the provision of E-Learning for your franchise and you agree to pay to us $20 per hour for teaching time in addition to the royalties due on E-Learning Fees. | Schedule 1-Franchise Location |
Schedule 2-Lease Rider
Schedule 3-ACH Authorization Form
Schedule 4-Initial Inventory Agreement
Schedule 5-State Law Addenda
FRANCHISE AGREEMENT
| 11. | Within 30 days | of termination or expiration, | furnish to us satisfactory | evidence of your |
|---|
2. FEES AND PAYMENTS.
- A. Royalty Fees. You must pay to us a "Royalty Fee" of 14% of Regular Gross Sales by the 19th of each month, or more frequently as the Company may designate, subject to a $750/month minimum, with such fee to begin the earlier of 180 days after the Effective Date of the Franchise Agreement or the first day of class, as follows:
- (1) "Regular Gross Sales" means all sales or revenues (other than Additional Program Sales and Add-On Gross Sales), derived directl
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, Best Brains has the right to designate a more frequent payment schedule for royalty fees. Franchisees are typically required to pay a royalty fee of 14% of Regular Gross Sales by the 19th of each month, with a minimum of $750 per month. This fee obligation starts either 180 days after the franchise agreement's effective date or on the first day of classes, whichever comes first.
Regular Gross Sales include all revenues from the Franchised Business, including E-Learning, registration fees, and business interruption insurance proceeds. However, it excludes sales taxes collected and remitted to the appropriate taxing authority, as well as the amount of approved coupons that have been previously included in Regular Gross Sales.
Additionally, Best Brains franchisees must pay 14% of Additional Program Sales and 7% of Regular Gross Sales earned from aftercare or camp services. It's important to note that Best Brains retains the right to modify the payment timing and procedures, as detailed in the Operations Manual, giving them the flexibility to adjust the payment schedule as needed.