When were initial franchise fees historically recognized by Body Brain Center?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
ting Body & Brain Center.
Notes to the Financial Statements December 31, 2024 and 2023
NOTE D - COMMITMENTS AND CONTINGENCIES (CONTINUED)
Licensing Agreement (Continued)
Licensor grants to Licensee, for the term of agreement, a non-exclusive license to use the licensed materials for distribution of Brain Education Programs and/or operation of Body & Brain Center within the authorized region and the right to sublicense the licensed materials to franchisees for the sole purpose of operating Body & Brain Centers pursuant to the terms of franchise agreements within the authorized region.
Under the terms of this agreement, the Company pays 20% on the total of the initial franchise fee, franchise renewal fee, training fee and transfer fee and 50% of royalties earned from franchisees by the Company. F
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not explicitly state when Body Brain Center has historically recognized initial franchise fees in the past. However, Note D - Commitments and Contingencies within the financial statements does mention the licensing agreement Body Brain Center has with BR Consulting, Inc. According to the agreement, Body Brain Center pays 20% of the total initial franchise fee, franchise renewal fee, training fee, and transfer fee to BR Consulting, Inc. This agreement has been in place and automatically renewed annually. The document provides financial details related to this agreement for the years 2023 and 2024, indicating the amounts paid to BR Consulting, Inc. for license expenses.
Specifically, the license expenses totaled $105,963 in 2023 and $111,939 in 2024. Additionally, the document notes that as of December 31, 2024, Body Brain Center owed $2,006 to BR Consulting Inc., which was included in accounts payable. These figures suggest that Body Brain Center recognizes initial franchise fees as part of its broader financial reporting and obligations under the licensing agreement. However, the exact timing of when the initial franchise fee is recognized as revenue is not detailed in this section.
To gain a clearer understanding of when Body Brain Center recognizes initial franchise fees, a prospective franchisee should inquire directly with the franchisor about their specific accounting practices and revenue recognition policies. This information is crucial for understanding the financial health and stability of the franchise system. Understanding the timing of revenue recognition can help franchisees better assess their investment and potential returns.