What is the purpose of the additional 4% royalty fee during the Probationary Period for a Best Brains franchise?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Upon subsequent audits, conducted at random, if the franchise has a poor review, the royalty will remain at 18% and reestablish a Probationary Period.
The additional 4% added to the royalty will be used toward Brand Development Fund.
Upon a successful re-audit, the additional royalty fee may be removed and the franchised location will no longer be under a probationary period.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, a franchisee may enter a Probationary Period if they receive a poor review during an audit. These audits can occur 6-12 months after enrolling the first student, and at any time thereafter. During this Probationary Period, the royalty fees increase to 18%, which is a 4% increase from the standard 14% royalty fee. The Probationary Period can last for up to 6 months. Subsequent random audits may also trigger a Probationary Period if a poor review is received.
The additional 4% royalty fee collected during the Probationary Period is specifically allocated to the Brand Development Fund. This fund is used by Best Brains for the overall development and promotion of the brand.
If a Best Brains franchisee successfully passes a re-audit, the additional royalty fee may be removed, and the franchise will no longer be under the Probationary Period. This provides an incentive for franchisees to improve their performance and adhere to Best Brains' standards to avoid the higher royalty fees and the probationary status.