Which sections of the Best Brains Franchise Agreement address the franchisee's obligation to pay fees?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 6: OTHER FEES]
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.
- Note 2 All fees are uniformly imposed by, collected by and payable to us via EFT and are non-refundable.
You must complete the ACH Authorization Form attached as Schedule 3 to the Franchise Agreement when you enter into the Franchise Agreement with us.
- Note 3 All specified fees, contributions and dollar amounts referred to in the franchise agreement may be increased from time to time by us, but in no event more than once during any fiscal year of ours, to reflect increases in the Metropolitan Area Consumer Price Index for Urban Consumers - All Items (1982-1984 = 100) ("Consumer Price Index") from the date of the franchise agreement, as published by the U.S.
Department of Labor, or in a successor index.
The initial increase will be based solely on any increase of the Consumer Price Index from and after July 1, 2011.
Any such increase will be uniform as to all BEST BRAINS learning center franchisees.
Note 4 We normally collect fees from clients on your behalf and then disburse the appropriate funds to you less any Royalty Fees, Brand Development Fund, or other amounts that you may owe us.
Note 5- Liquidated Damages. If you terminate the franchise agreement other than in accordance with the terms of Section 7.A. of the franchise agreement, or if we terminate the franchise agreement pursuant to the terms of Section 7.B. of the franchise agreement, then you shall pay us by the effective date of such termination, as liquidated damages, $30,000.
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Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 21–22)
What This Means (2025 FDD)
According to Best Brains's 2025 Franchise Disclosure Document, several sections of the Franchise Agreement outline the franchisee's obligation to pay fees. Item 6, titled "OTHER FEES," generally discusses various fees payable to Best Brains. Note 2 within Item 6 states that all fees are uniformly imposed, collected via EFT, and non-refundable. Note 3 indicates that Best Brains may increase specified fees, contributions, and dollar amounts, but no more than once per fiscal year, based on increases in the Consumer Price Index. Note 4 mentions that Best Brains normally collects fees from clients on the franchisee's behalf and then disburses the appropriate funds to the franchisee, less any Royalty Fees, Brand Development Fund contributions, or other amounts owed to Best Brains. Note 5 specifies that franchisees may have to pay $30,000 in liquidated damages if they terminate the franchise agreement outside the terms of Section 7.A, or if Best Brains terminates the agreement under Section 7.B.
Item 6 also details specific royalty fees. Franchisees must pay a Royalty Fee of 14% of Regular Gross Sales by the 19th of each month, subject to a $750 monthly minimum. Regular Gross Sales includes most revenues but excludes sales taxes and approved coupon amounts. Franchisees also pay 14% of Additional Program Sales and 7% of Regular Gross Sales earned from aftercare or camp services.
Additionally, the document mentions a transfer fee of $2,500 for transferring either a Premium Learning Center or a Teacher Learning Center franchise, as stated in Item 23. Item 17 notes that under Section 7.E, upon termination or non-renewal, franchisees must pay all amounts owed to Best Brains. Furthermore, if a franchise receives a poor review during an audit, royalty fees may increase to 18%, and the location will enter a Probationary Period for up to 6 months. The additional 4% will be used toward the Brand Development Fund, and this additional royalty fee may be removed upon a successful re-audit.