What is included in 'Regular Gross Sales' for a Best Brains franchise?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
us. FA Sec. 10(N). |
- Note 1- 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:
- (1) "Regular Gross Sales" means all sales or revenues (other than Additional Program Sales and Add-On Program Gross Sales), derived directly or indirectly from the Franchised Business, including on and off premises (e.g., E-Learning). Regular Gross Sales also includes registration fees for any program and business interruption insurance proceeds. Regular Gross Sales does not include:
- (i) sales taxes collected from customers and paid to the appropriate taxing authority, and
- (ii) the amount of all coupons redeemed at the Franchised Business (but only if the coupons have been previously approved by the Company as provided in this Agreement and only if such coupons have been included
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, Regular Gross Sales are used to calculate royalty fees, which are 14% of Regular Gross Sales, subject to a minimum of $750 per month. Regular Gross Sales encompass all sales or revenues derived directly or indirectly from the Franchised Business, including both on-premises and off-premises activities such as E-Learning. This broad definition ensures that all revenue streams related to the core Best Brains program contribute to the royalty calculation.
Specifically, Regular Gross Sales include registration fees for any program and business interruption insurance proceeds. However, there are exclusions. Regular Gross Sales do not include sales taxes collected from customers and remitted to the appropriate taxing authority. Additionally, the value of redeemed coupons is excluded, but only if the coupons have been previously approved by Best Brains and included in Regular Gross Sales initially.
It's important for prospective Best Brains franchisees to understand what constitutes Regular Gross Sales because this figure directly impacts the royalty fees owed to the franchisor. Accurately tracking and reporting all applicable sales and revenues is crucial for compliance with the franchise agreement and avoiding potential discrepancies or penalties. Franchisees should also be aware of the conditions under which coupons can be excluded from Regular Gross Sales to ensure proper accounting practices.