Is the annual maintenance fee for the Application License Agreement for a Brain Balance franchise subject to any adjustments, and if so, what kind?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
reunder, until such time as FRANCHISEE has made payment of all amounts due to COMPANY and has filed all reports with COMPANY required to be filed by FRANCHISEE.
6.04. Application License Fees
- (a) FRANCHISEE shall enter into an Application License Agreement annexed hereto as Exhibit 1 and pay an initial license fee in the amount of $10,000 and annual maintenance fees as specified in the Application License Agreement and the Operations Manual. The annual maintenance fees are subject to an annual CPI adjustment. Unless terminated earlier
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees must enter into an Application License Agreement and pay an initial license fee of $10,000. In addition to this initial fee, franchisees are also required to pay annual maintenance fees as specified in the Application License Agreement and the Operations Manual. These annual maintenance fees are subject to an annual adjustment based on the Consumer Price Index (CPI). The Application License Agreement lasts for the same term as the Franchise Agreement, granting the franchisee unlimited users for the center.
This CPI adjustment means that the annual maintenance fees can increase over time, reflecting changes in the cost of living and inflation. Franchisees should factor in potential increases to these fees when budgeting for their ongoing operational expenses. The specific details of how the CPI adjustment is calculated and applied would be found in the Application License Agreement and the Operations Manual, which franchisees should review carefully.
It is common practice in franchising for fees to be subject to adjustments, often tied to inflation or other economic indicators. This allows the franchisor to maintain the real value of the fees over time. Prospective Brain Balance franchisees should understand the terms of the Application License Agreement and how the CPI adjustment will impact their annual costs.