Must a Best Brains franchisee verify and sign all reports submitted to the franchisor?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Reports. You shall furnish to us the following reports among others:
- (i) On the 10th of each month, an electronic or other report (as we designate) of the Gross Sales of the Franchised Business for the period of the 11th of the previous month to the 10th of the current month;
- (ii) On the 10th of each month, a copy of your bank statement for the previous month
- (iii) On the 10th of each month, a copy of your payment report from your payment processing service (currently CSG Forte) for the period of the 11th of the previous month to the 10th of the current month
- (iv) On the 10th of each month, a profit and loss statement for the preceding calendar month and a year-to-date profit and loss statement and balance sheet; and
- (v) within seventy-five days after the end of each calendar year, a calendar year end balance sheet and an annual profit and loss statement for the calendar year reflecting all year end adjustments.
You must verify and sign all reports submitted to us.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, franchisees are required to verify and sign all reports submitted to the company. These reports include monthly gross sales reports, bank statements, payment processing reports, monthly and year-to-date profit and loss statements, and annual balance sheets and profit and loss statements. These reports are due on the 10th of each month, with the exception of the annual reports, which are due within 75 days after the end of each calendar year.
This requirement ensures that Best Brains franchisees take responsibility for the accuracy of the financial information they provide to the franchisor. By verifying and signing the reports, franchisees are attesting to the validity of the data, which helps maintain transparency and accountability within the franchise system. This practice is fairly standard in franchising, as franchisors rely on franchisee-submitted data for royalty calculations, marketing fund contributions, and overall system performance analysis.
Failure to submit these reports on time may result in Best Brains estimating the franchisee's gross sales and debiting any unpaid royalty fees, advertising contributions, or other amounts due via electronic funds transfer. Best Brains is also authorized to use the data supplied by franchisees for various purposes, including operations and advertising reports. Therefore, it is crucial for prospective franchisees to understand the importance of accurate and timely reporting to maintain a good standing with the franchisor and avoid potential penalties.