How is 'Total Sales' calculated for a Best In Class Education Center franchise?
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 than a full calendar month. If the number of subjects taken by a student changes during the course of a month, then you must pay the Monthly Student User Fee based on the total number of subjects taken by the student during the month, regardless of how many subjects are taken by the student at any given point in time during the month. For purposes of this section, a "Legacy Center" refers to a Center owned b
Source: Item 23 — RECEIPT (FDD pages 47–204)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the 'Total Sales' calculation for a Best In Class Education Center franchise is not explicitly defined within the provided excerpts. However, the document does detail how 'Monthly Student User Fees' are calculated, which likely contributes to the overall revenue of a center. These fees are determined by multiplying a base fee by the total number of subjects each student is taking at the center as of the last day of the preceding month. The base fee is subject to change, with the franchisor having the right to increase it once per calendar year, provided they give at least 90 days' notice. The maximum annual increase is $2 per student per subject per month, and the absolute maximum base fee is capped at $15 per student per subject per month.
For renewing franchisees operating a 'Legacy Center,' the initial base fee is lower, starting at $4 per student per subject per month, and increases by $1 each January 31st until it matches the standard base fee for new franchisees. The fees may also be prorated during the first or last month of the franchise term if those months are not full calendar months. 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.
While the FDD excerpts do not provide a direct formula for 'Total Sales', it is reasonable to assume that it includes the sum of all 'Monthly Student User Fees' collected, along with any other revenues generated by the Best In Class Education Center. A prospective franchisee should seek clarification from the franchisor on the precise components of 'Total Sales' to fully understand the financial reporting and royalty calculations.