When does the Royalty Fee payment obligation begin for a Best Brains franchise?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
TX 78711 | |### EXHIBIT B
| Number of students enrolled in your Center | Monthly Fee | |---|---| | 0-100 students | $40 | | 101-200 students | $60 | | 200+ students | $80 | FRANCHISE NUMBER _________________
TABLE OF CONTENTS
| Fee | Amount | |
|---|---|---|
| E-Training Certification | $375 to be equipped to offer e-learning; $75 for each additional course required | |
| Subject Material Fee | $5 per subject per month for the availability and distribution of e-learning material | |
| Teaching Time | If we reasonably feel that you are not meeting our quality standards for E-Learning, we reserve the right to take over the provision of E-Learning for your franchise and you agree to pay to us $20 per hour for teaching time in addition to the royalties due on E-Learning Fees. | Schedule 1-Franchise Location |
Schedule 2-Lease Rider
Schedule 3-ACH Authorization Form
Schedule 4-Initial Inventory Agreement
Schedule 5-State Law Addenda
FRANCHISE AGREEMENT
| 11. | Within 30 days | of termination or expiration, | furnish to us satisfactory | evidence of your |
|---|
2. FEES AND PAYMENTS.
- A. 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, with such fee to begin the earlier of 180 days after the Effective Date of the Franchise Agreement or the first day of class, as follows:
- (1) "Regular Gross Sales" means all sales or revenues (other than Additional Program Sales and Add-On 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 Franchis
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, franchisees must pay a Royalty Fee of 14% of Regular Gross Sales, with a minimum of $750 per month. This payment obligation starts on the earlier of two dates: either 180 days after the Effective Date of the Franchise Agreement or the first day of classes.
"Regular Gross Sales" for Best Brains includes all revenues from the Franchised Business, including those from E-Learning, registration fees, and business interruption insurance proceeds. However, it excludes sales taxes collected from customers and amounts from approved coupons that have been included in Regular Gross Sales.
Additionally, Best Brains franchisees must pay 14% of Additional Program Sales throughout the agreement term. They also pay 7% of Regular Gross Sales earned from aftercare or camp services. It's important to note that 6-12 months after enrolling the first student, the franchise will be audited, and a poor review can increase royalty fees to 18% during a probationary period.