Can Best Brains review a franchisee's books to determine advertising expenditures?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
u are granted the rights to the number we have the right to ask for the rights upon termination or transfer. You acknowledge that we shall have the sole rights to and interest in all such telephone numbers.
- (i) We shall notify the you of monthly of the cost of such telephone service and you shall, within five days of receipt of such a bill, reimburse us for our costs in maintaining telephone numbers for the Franchised Business.
- (ii) If you do not so reimburse us, we may instruct the telephone service provider to terminate such telephone number(s) or to transfer such number(s) to us or our designee.
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- Grand Opening. Before opening your Franchised Business, you must spend a minimum of $14,000 on local advertising, marketing and promotion of the opening of the Franchised Business in accordance with an opening marketing plan approved by us. These grand opening expenditures are in addition to the Brand Development Fund contributions specified above.
We may require you to pay to the Brand Development Fund at the time of the "open house" before the scheduled opening of the Franchised Business these amounts which we will then spend for local advert
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, Best Brains has the right to review a franchisee's books and records to determine if the franchisee is meeting their advertising and promotion obligations. This review can occur from time to time, meaning there is no set schedule, but Best Brains can conduct these reviews at their discretion.
Best Brains requires franchisees to spend a minimum of $250 per month, or $750 per quarter, on local advertising and promotions. If Best Brains determines that a franchisee has not spent the required amount on advertising, they may require the franchisee to pay the unexpended amounts to the Brand Development Fund. This ensures that all franchisees are contributing to local marketing efforts, even if they are not directly spending the money themselves.
It is important to note that not all expenditures qualify as advertising expenditures. According to the FDD, payments for items that Best Brains deems inappropriate for meeting the minimum advertising requirements, such as permanent on-premises signs, lighting, or vehicles, are not included. This means franchisees need to be careful about what they count towards their advertising obligations and should seek clarification from Best Brains if they are unsure whether a particular expense will qualify.