What financial instruments are potentially subjected to credit risk for Body Brain Center?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
st of sales, selling, general and administrative expenses, and research and development expenses. This change is intended to address investor requests for more granular expense information. The amendments are effective for public business entities for fiscal years beginning after December 15, 2026, including interim periods within those fiscal years. While the Company is not classified as a public business entity, this update is included for reference.
The Company will continue to monitor developments related to this ASU and assess any potential implications for its financial statements and related disclosures.
NOTE B - NOTE RECEIVABLE
Promissory Note Agreement
On June 9, 2024 ("Effective Date"), Body & Brain Yoga and Health Centers, Inc., an Arizona corporation (the "Borrower") promises to pay to the order of the Company (the "Lender"), the sum of $230,000 with interest thereon at 5.47% per year. Borrower shall make a monthly payment in the amount of $1,048.42 for interest. The unpaid principal shall be payable in full on or before June 9, 2025 (the "Due Date").
On September 21, 2024 ("Effective Date"), Body & Brain Yoga and Health Centers, Inc., an Arizona corporation (the "Borrower") promises to pay to the order of the Company (the "Lender"), the sum of $150,000 with interest thereon at 4.73% per year. Borrower shall make a monthly payment in the amount of $591.25 for interest. The unpaid principal shall be payable in full on or before September 21, 2025 (the "Due Date).
On November 8, 2024, the Company received
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, the company's note receivable is subject to credit risk. Specifically, on June 9, 2024, Body & Brain Yoga and Health Centers, Inc. promised to pay Body Brain Center $230,000 with a 5.47% annual interest rate, requiring monthly interest payments of $1,048.42, with the principal due by June 9, 2025. Additionally, on September 21, 2024, a separate agreement stipulated a $150,000 payment with a 4.73% annual interest rate, involving monthly interest payments of $591.25, with the principal due by September 21, 2025.
On November 8, 2024, Body Brain Center received a $100,000 payment towards the $380,000 total note receivable. Subsequently, on November 9, 2024, the two existing notes were consolidated into a new note agreement for the remaining $280,000. This new agreement required Body & Brain Yoga and Health Centers, Inc. to repay the $280,000 principal with a 4.36% annual interest rate, mandating monthly interest payments of $1,017.33, with the full unpaid principal due by November 9, 2025.
For a prospective Body Brain Center franchisee, this indicates that the financial health of Body Brain Center is intertwined with that of its parent company, Body & Brain Yoga and Health Centers, Inc., due to these significant related-party transactions. The risk lies in the possibility that Body & Brain Yoga and Health Centers, Inc. may default on the note, which could adversely affect Body Brain Center's financial stability. It is important to note that the note receivable represents a substantial asset for Body Brain Center, and its potential non-payment could impact the company's ability to meet its own financial obligations and support its franchisees.
Prospective franchisees should consider this related-party lending arrangement as part of their due diligence. Understanding the repayment history and the current financial standing of Body & Brain Yoga and Health Centers, Inc. is crucial. Franchisees may want to inquire about the measures Body Brain Center has in place to mitigate the risk associated with this note receivable and how the company plans to address any potential shortfalls if the parent company fails to meet its obligations. This information will provide a clearer picture of the financial risks and dependencies involved in investing in a Body Brain Center franchise.