What deductions can Best In Class Education Center make from the purchase price of my center?
Best_In_Class_Education_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
e. On each royalty fee due date, you agree to pay LBIS (or us, if we so instruct) a BCP-LMS Monthly Fee, which is calculated as the sum of: (i) 2% of the Gross Sales minus Enrichment Sales; (ii) 1% of Special Program Sales; and (iii) Monthly Student User Fees (calculated in accordance with §14.3(c) below).
- (c) Monthly Student User Fees. "Monthly Student User Fees" are calculated by multiplying a "base fee" (as set forth in the Manual) by the total number of subjects taken by students enrolled at your Center as of the last day of the immediately preceding month. The base fee is currently $8 per student per subject per month (Mathematics, English and STEM are each considered a separate "subject"); provided, however, that: (i) we may increase the base fee, not more than once per calendar year, upon at least 90 days' prior notice; (ii) the maximum annual increase to the base fee is $2 per student per subject per month; (iii) the maximum base fee that we may charge at any point during the Term is $15 per student per subject per month; and (iv) if you are a renewing franchisee who operates a Legacy Center (as defined below), your initial base fee will be $4 per student per subject per month but will increase by $1 each January 31st until it equals the standard base fee charged to new franchisees. Monthly Student User Fees applicable during the first and/or last month of the Term may be prorated if the first and/or last month of the Term are less
Source: Item 23 — RECEIPT (FDD pages 47–204)
What This Means (2025 FDD)
Based on the 2025 Best In Class Education Center Franchise Disclosure Document, the franchisor details how "Monthly Student User Fees" are calculated, which are relevant to understanding potential deductions. These fees are determined by multiplying a "base fee" by the total number of subjects taken by students enrolled at your center as of the last day of the preceding month. Currently, the base fee is $8 per student per subject per month, with Mathematics, English, and STEM each considered separate subjects.
However, Best In Class Education Center retains the right to increase this base fee, but not more than once per calendar year, and must provide at least 90 days' prior notice. The maximum annual increase is capped at $2 per student per subject per month, and the absolute maximum base fee that can be charged during the term is $15 per student per subject per month. For renewing franchisees operating a "Legacy Center," the initial base fee is $4 per student per subject per month, increasing by $1 each January 31st until it matches the standard base fee for new franchisees.
It's important to note that Monthly Student User Fees may be prorated during the first and/or last month of the term if these months are less than a full calendar month. If a student changes the number of subjects they are taking during a month, the Monthly Student User Fee is based on the total number of subjects taken by the student during the month, regardless of when the change occurs. Understanding these fee calculations is crucial for managing your finances as a Best In Class Education Center franchisee and anticipating potential changes in your monthly expenses.