What constitutes 'Regular Gross Sales' for a Best Brains franchise when calculating Royalty Fees?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Box 12887 Austin, 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. | Wit
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, 'Regular Gross Sales' are a key component in calculating the royalty fees franchisees must pay. The royalty fee is 14% of Regular Gross Sales, with a minimum of $750 per month. This fee is due by the 19th of each month, starting either 180 days after the franchise agreement's effective date or from the first day of classes, whichever comes first. Understanding what constitutes 'Regular Gross Sales' is crucial for managing finances and forecasting royalty payments accurately.
'Regular Gross Sales' include all sales or revenues derived directly or indirectly from the Best Brains franchised business, encompassing both on-premises and off-premises activities, such as E-Learning. It also includes registration fees for any program and business interruption insurance proceeds. However, there are specific exclusions. Sales taxes collected from customers and remitted to the appropriate taxing authority are not included in Regular Gross Sales. Additionally, the amount of all coupons redeemed at the franchised business is excluded, but only if these coupons have been previously approved by Best Brains and included in Regular Gross Sales initially.
It's important to note that Best Brains also distinguishes between 'Regular Gross Sales,' 'Additional Program Sales,' and 'Add-on Programs Sales,' each having different royalty rates. Additional Program Sales, such as Public Speaking, Baby Genius+, and Test Prep, also incur a 14% royalty. Add-on Programs Sales, like aftercare or camp services, are subject to a 7% royalty. Furthermore, the FDD states that after an audit, royalty fees could increase to 18% upon a poor review, so franchisees must maintain standards to avoid increased costs.