What is the minimum monthly Royalty Fee that a Best Brains franchisee must pay?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
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's 2025 Franchise Disclosure Document, franchisees are required to pay a royalty fee of 14% of their regular gross sales. However, Best Brains stipulates a minimum monthly royalty fee of $750. This means that even if 14% of a franchisee's regular gross sales is less than $750 in a given month, they must still pay the $750 minimum.
Regular gross sales for Best Brains includes all revenues derived directly or indirectly from the franchised business, including e-learning, registration fees for any program, and business interruption insurance proceeds. It excludes sales taxes collected from customers and the amount of approved coupons redeemed at the franchised business.
This minimum royalty fee ensures that Best Brains receives a baseline income from each franchise location, regardless of its monthly sales performance. For a prospective franchisee, this means they need to ensure their projected sales can comfortably cover this minimum royalty payment, especially during the initial months of operation when sales may be lower. Failure to meet the minimum royalty obligations could put a strain on the franchisee's finances.