What is the minimum monthly Royalty Fee 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 in Regular Gross Sales)
- (2) Additional Program Sales. You shall pay us 14% of Additional Program Sales throughout the term of this Agreement. Additional Programs include but are not limited to: all programs offered by Best Brains such as Public Speaking, Baby Genius+, and Test Prep; revenue from events organized by the Franchised Business, including on and off premises; revenue from programs offered by the by the Franchised Business which have been previously approved by the Company as provided in the Franchise Agreement.
- (3) Add-on Programs Sales. You shall pay us 7% of Regular Gross Sales earned by providing aftercare services and/or camp services.
- (4) 6-12 months after enrolling the first student, and at any time thereafter, the franchise will be audited. Upon a poor review, royalty fees will increase to 18% and the franchised location will enter a Probationary Period for up to 6 months.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, a franchisee is obligated to pay a royalty fee of 14% of Regular Gross Sales, with a minimum of $750 per month. This payment is due by the 19th of each month, or more frequently if Best Brains designates. The royalty 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 those from on-site and off-site activities like E-Learning, as well as registration fees for any program and business interruption insurance proceeds. However, Regular Gross Sales do not include sales taxes collected from customers and remitted to the appropriate taxing authority, or the amount of approved coupons that have been previously included in Regular Gross Sales.
It's important to note that this royalty fee can increase to 18% if the franchise receives a poor review during audits conducted 6-12 months after enrolling the first student, and at any time thereafter. This higher royalty fee remains in place during a Probationary Period of up to 6 months, and can be reimposed after subsequent poor reviews from random audits. The additional 4% added to the royalty will be used toward the Brand Development Fund. However, upon a successful re-audit, the additional royalty fee may be removed and the franchised location will no longer be under a probationary period.