For Body Brain Center, on what pages of the FDD can I find the Notes to Financial Statements?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
Notes to the Financial Statements December 31, 2024 and 2023
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Body and Brain Center, LLC (the "Company") is presented to assist in understanding the Company's financial statements. The financial statements and notes are the representations of the Company's management who is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.
Nature of Operation
Body and Brain Center, LLC is an Arizona limited liability Company that was organized on December 12, 2007. The Company is a wholly-owned subsidiary of Body & Brain Yoga and Health Centers, Inc. The Company is engaged in the business of franchising a chain of studios providing yoga classes, including dieting programs, exercise programs, relaxation programs, healing programs, life coaching and other mind-body practice programs, known as "Body & Brain" franchisees. Each franchisee independently operates a center using the Marks, the Unique System, the Body and Brain name, as well as the support, guidance and other methods and materials provided or developed by the Company.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Estimates are based on management's previous experience including expectations of future events under normal conditions. The aforementioned judgments, estimates and assumptions are periodically re-assessed in order to be in line with current available data and reflect current risks.
Goodwill
Goodwill represents the excess of the amount paid by the Company over the book value of the assets purchased for a direct center. Goodwill is not amortized but tested at least annually for impairment. To determine whether goodwill is impaired, annually or more frequently if needed, the Company performs a multi-step impairment test. The Company may first assess qualitative factors to determine if it is more likely than not that the carrying value of a reporting unit exceeds its estimated fair value.
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
According to the 2025 Body Brain Center Franchise Disclosure Document, the Notes to the Financial Statements can be found on multiple pages within Item 23. Specifically, notes related to the financial statements for December 31, 2024, and 2023 are located on page 123. Additional notes pertaining to the financial statements for December 31, 2023, and 2022 are on page 143, while notes for December 31, 2022, and 2021 are on pages 163 and 167.
These notes provide crucial context and details about Body Brain Center's financial statements, offering insights into the company's accounting policies, related party transactions, and other significant financial matters. For instance, Note A summarizes the significant accounting policies used in preparing the financial statements, while Note C discusses related party transactions, such as advertising fee income from Body & Brain Yoga and Health Centers, Inc. amounting to $58,783 for the year ended December 31, 2024.
Prospective franchisees should carefully review these notes to gain a comprehensive understanding of Body Brain Center's financial health and stability. Understanding the accounting policies and related party transactions can help franchisees assess the franchisor's financial practices and potential risks. The notes also provide information on agreements between Body Brain Center and its parent company, Body & Brain Yoga and Health Centers, Inc., such as software service agreements and premises use agreements, which could impact the franchisee's operations and financial obligations.
By examining these detailed notes, potential franchisees can make informed decisions about investing in a Body Brain Center franchise, ensuring they are aware of the financial intricacies and relationships that could affect their business.