How often does the licensing agreement for Body Brain Center automatically renew?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company (Licensee) has a licensing agreement with BR Consulting, Inc. (Licensor). This agreement automatically renews on an annual basis until terminated.
BR consulting, Inc. is the owner of all the intellectual property rights including, but not limited to, logos, trademarks, service marks, copyrights, and trade secrets which are related with Brain Education programs and/or operating Body & Brain Center.
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. Furthermore, concerning the income derived from memberships and private lessons offered by the Direct Center, a contractual royalty rate has been in effect since 2022. In 2024, a royalty rate of 3%, computed based on the operating margin rate preceding the inclusion of Direct Center's royalty payments, was applied, resulting in a payment of $2,060.
License expenses under this agreement totaled $111,939 and $105,963 for the years ended December 31, 2024 and 2023, respectively.
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, the licensing agreement between the Company (Licensee) and BR Consulting, Inc. (Licensor) automatically renews on an annual basis. This automatic renewal continues until the agreement is terminated by either party. BR Consulting, Inc. owns all intellectual property rights related to Brain Education programs and the operation of Body & Brain Centers, including logos, trademarks, service marks, copyrights, and trade secrets.
This licensing agreement is crucial for Body Brain Center because it grants the company the right to use and sublicense the licensed materials for distributing Brain Education Programs and operating Body & Brain Centers within an authorized region. This includes the right to sublicense these materials to franchisees, allowing them to operate their own Body & Brain Centers under the terms of their franchise agreements. The agreement ensures that Body Brain Center and its franchisees can legally utilize the intellectual property necessary for their business operations.
Under the terms of the licensing agreement, Body Brain Center pays BR Consulting, Inc. a percentage of various fees and royalties. Specifically, Body Brain Center pays 20% of the total of the initial franchise fee, franchise renewal fee, training fee, and transfer fee, as well as 50% of the royalties earned from franchisees. Additionally, a 3% royalty rate is applied to income derived from memberships and private lessons offered by the Direct Center, calculated based on the operating margin rate before including the Direct Center's royalty payments. In 2024, this royalty payment amounted to $2,060. License expenses for Body Brain Center totaled $111,939 in 2024 and $105,963 in 2023.
Prospective franchisees should understand the financial implications of this licensing agreement, as the fees and royalties paid by Body Brain Center to BR Consulting, Inc. can affect the overall profitability of the franchise system. It is also important to note that the licensing agreement is subject to termination, which could impact the franchisee's ability to operate under the Body & Brain Center brand. Therefore, franchisees should inquire about the conditions under which the licensing agreement can be terminated and how this might affect their franchise agreement.