Does Body Brain Center expense advertising costs when they are incurred, or at another time?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
On the sixth (6 th) day of each month, you must pay us an advertising fund fee equal to 0.5% of your Program Sales for the prior month's operations. 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 Section, we have no obligation to expend our own funds or resources for any Advertising Campaign.
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Body Brain Center franchisees are required to contribute to an advertising fund. Specifically, on the sixth day of each month, franchisees must pay an advertising fund fee equivalent to 0.5% of their Program Sales from the previous month. These funds, along with contributions from other franchisees, fines, and supplier rebates, are deposited into the advertising fund.
Body Brain Center uses these advertising funds for marketing and advertising campaigns. While the FDD states that Body & Brain Center may create and provide advertising and marketing materials, it does not specify exactly when these advertising costs are expensed.
Prospective franchisees should inquire with Body Brain Center about the specific accounting practices related to the advertising fund. Understanding when and how these funds are expensed can provide better insight into the actual financial impact of advertising on the franchisee's business.