factual

When does Body Brain Center recognize revenue from franchise fees?

Body_Brain_Center Franchise · 2025 FDD

Answer from 2025 FDD Document

izational documents and a current Certificate of Good Standing (or the functional equivalent thereof). You represent that the Entity is duly formed and validly existing under the laws of the state of its formation or incorporation.

13. FEES

  • 13.1 Initial Franchise Fee. You agree to pay us an initial franchise fee (the "Initial Franchise Fee") at the time you submit to us the site that you propose for your Business. The Initial Franchise Fee is $10,000, except that the Intial Franchise Fee for an additional Body & Brain Center shall be $9,000 if (i) you are an existing franchisee under, and in full compliance with, an existing franchise agreement for a Body & Brain Center franchise, (ii) you and we agree to enter into a new franchise agreement

Source: Item 23 — RECEIPT (FDD pages 43–178)

What This Means (2025 FDD)

According to the 2025 Body Brain Center Franchise Disclosure Document, the initial franchise fee is considered fully earned and non-refundable once the Franchise Agreement has been signed. This means Body Brain Center recognizes the initial franchise fee as revenue at the point when the agreement is signed, regardless of whether the franchisee has opened their center or begun operations. The initial franchise fee is $10,000, but is reduced to $9,000 for existing franchisees in full compliance with their current agreement who are opening an additional Body & Brain Center before their existing agreement expires or terminates.

This revenue recognition policy is a standard practice in the franchise industry, as the fee is intended to compensate Body Brain Center for granting the franchise rights, providing training, and offering support to the new franchisee. However, it's important for prospective franchisees to understand that this fee is non-refundable once the agreement is signed, even if they later decide not to proceed with opening their Body & Brain Center.

Additionally, Body Brain Center also collects a training fee of $10,000 prior to the franchisee attending the initial training program. This fee will be credited against the initial franchise fee if a Franchise Agreement is signed before the Franchise Evaluation Period expires. The training fee is refundable if the franchisee notifies Body Brain Center that they will not attend the training program before it begins, but is non-refundable under any other circumstances. Body Brain Center also receives ongoing royalties and advertising fees based on a percentage of sales, but the timing of revenue recognition for these fees is not specified in this excerpt.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.