Who administers the advertising fund for Body Brain Center franchisees?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
r prior approval.
Advertising Fund (Sections 9.1)
We have established and administer an advertising fund. We administer a single advertising fund for Body & Brain home-based franchisees and Body & Brain Center franchisees. The advertising fund will be used for local, regional or national marketing, advertising, sales promotion and promotional materials, public and consumer relations, publicity, website development,search engine optimization and any other programs that we deem necessary or appropriate. Currently, we intend to use the advertising fund to further develop the publicly accessible Body & Brain website to promote the brand and Body & Brain Centers and Body & Brain home-based franchises. The advertising fund may also be used to pay for the creation of marketing materials that our franchisees may use for local marketing purposes.
Advertising fund fees will be kept in a separate account and revenues received will be accounted for separately from our other funds and will not be used to defray any of our general operating expenses, except for such reasonable salaries, administrative costs and overhead as we may incur in activities reasonably related to the administration or direction of the advertising fund and its local, regional or national advertising programs (which may include, without limitation: conducting market research, preparing and conducting television, radio, magazine, billboard, Internet, newspaper, digital advertising and other media programs and activities and employing advertising agencies to assist therewith, collecting and accounting for contributions to the advertising fund, and paying for the preparation and distribution of marketing materials and financial accountings of the advertising fund). None of the advertising fund fees will be used for advertisements principally directed at selling additional franchises. All funds deposited into the advertising fund that are not used in the fiscal year in which they accrue will be utilized in the following fiscal year. Any surplus of funds in the advertising fund may be invested and we may lend money to the advertising fund if there is a deficit. During the fiscal year ended December 31, 2024, we spent the advertising fund fees in the following manner: 0% for production; 14% for media placement; 0% for administrative expenses; and 86% for other purposes.
You must pay us an advertising fund fee equal to 0.5% of your Program Sales (defined in Item 6). We will deposit into the advertising fund all: (i) advertising fund fees paid by you and other franchisees (unless we allocate the fees to an advertising cooperative); (ii) fines paid by you and other franchisees; and (iii) rebates or other payments we receive from suppliers based on franchisee purchases. Any company-owned Body & Brain Center or Body & Brain home-based business will contribute to the advertising fund on the same basis as our franchisees. However, if we modify the amount or timing of the contributions that must be
made to the advertising fund, any company-owned Body & Brain Center or Body & Brain home-based business that is established or acquired after the modification may contribute to the advertising fund utilizing the modified amount or timing. Except as stated in this paragraph, we have no obligation to expend our own funds or resources for any marketing activities in your area.
Source: Item 11 — FRANCHISOR'S ASSISTANCE**, ADVERTISING, **COMPUTER SYSTEMS AND TRAINING (FDD pages 20–29)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, the advertising fund is established and administered by Body Brain Center itself. This single fund is used for both Body & Brain home-based franchisees and Body & Brain Center franchisees. The funds are intended for various marketing and advertising activities, including local, regional, or national campaigns, sales promotions, public relations, website development, and search engine optimization. Body Brain Center has complete control and discretion over all advertising programs, including creative content, materials, and media placement.
Advertising fund fees are kept in a separate account, and revenues are accounted for separately from Body Brain Center's other funds. These fees are not used for the general operating expenses of Body Brain Center, except for reasonable salaries, administrative costs, and overhead related to the administration of the advertising fund. The FDD specifies that advertising fees will not be used to sell additional franchises. Any unspent funds in a fiscal year will be utilized in the following fiscal year, and Body Brain Center may invest surplus funds or lend money to the fund if there is a deficit.
For a prospective Body Brain Center franchisee, this means that they will contribute to an advertising fund that is managed by the franchisor. While franchisees contribute to the fund, Body Brain Center ultimately decides how the money is spent. An unaudited financial accounting of the advertising fund's operations will be prepared annually and made available to franchisees upon request, providing some transparency into how the funds are being used. Franchisees should note that Body Brain Center assumes no direct or indirect liability or obligation with respect to the maintenance, direction, or administration of the advertising fund and that the advertising fund will not be a trust and Body Brain Center will have no fiduciary obligations with respect to its administration of the advertising fund.