Can Best Brains vary payment timing and procedures, and if so, where would this information be detailed?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
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:
3. PAYMENT
3.1Franchisee agrees to reimburse Company for the cost of the initial inventory order, including shipping costs.
3.2Franchisee agrees that all costs will be reimbursed via ACH transfer, as detailed in Schedule 3 of the Best Brains Franchise Agreement.
For and in consideration of good and valuable consideration, the undersigned promises to pay to the order of Best Brains, Inc. ["Holder"] at 135 E. Algonquin Road, Suite B, Arlington Heights, Illinois 60005, or at Holder's option, at such other place as may be designated from time to time by Holder, the amount stated above, together with interest at the rate of 0% per annum on the unpaid balance computed from the date provided above, payable as follows:
[insert repayment terms]
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to the 2025 Best Brains Franchise Disclosure Document, the company has the right to designate payment timing. Specifically, royalty fees, which are 14% of Regular Gross Sales (subject to a $750/month minimum), are to be paid by the 19th of each month, "or more frequently as the Company may designate." This indicates that Best Brains retains the discretion to require more frequent royalty payments than monthly.
Additionally, the FDD specifies that franchisees agree to reimburse Best Brains for the cost of the initial inventory order, including shipping costs, via ACH transfer, as detailed in Schedule 3 of the Best Brains Franchise Agreement. This highlights the use of a specific payment method (ACH transfer) and directs franchisees to Schedule 3 for further details on the reimbursement process.
Furthermore, in instances where Best Brains provides financing to a franchisee, the payment terms, including interest rates and repayment schedules, are outlined in a promissory note. The note specifies that payments are to be made to Best Brains at its principal address or at such other place as may be designated from time to time by Best Brains. This clause allows Best Brains to alter the payment location at its discretion, providing flexibility in managing its financial transactions with franchisees.
In summary, Best Brains retains the right to modify payment timing and procedures, with specific details found within Item 23 of the FDD, Schedule 3 of the Franchise Agreement, and individual promissory notes related to financing.