Is the annual maintenance fee specified in the Application License Agreement for Brain Balance subject to any adjustments?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Maintenance Fees. Commencing upon execution hereof and until such time as the License granted hereunder is terminated , Licensee shall pay to Licensor the annual maintenance fees (the "Maintenance Fees") and the monthly third party platform hosting fees (the "Third Party Platform Fees") specified in Exhibit B.The Maintenance Fees may be increased by Licensor from time to time following the initial twelve (12) month period in accordance with the terms specified in Exhibit B. No increase in Maintenance Fees shall exceed the CPI (as defined below) increase with respect to the year prior to such increase. "CPI" means the Consumer Price Index issued by the U.S. Department of Labor, Bureau of Labor Statistics, N.Y.–Northeastern N.J. region for the immediately preceding December 31st . The Third Party Platform Fees may be increased on thirty (30) days' prior notice in the event that the third party hosting company increases fees charged to Licensor, and in the amount by which Licensor's costs increase.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the annual maintenance fees that a licensee pays to the licensor, along with monthly third-party platform hosting fees, as specified in Exhibit B of the Application License Agreement, are subject to potential adjustments. The maintenance fees may be increased by Brain Balance following the initial twelve-month period. However, any increase in maintenance fees cannot exceed the increase in the Consumer Price Index (CPI) for the N.Y.–Northeastern N.J. region for the preceding December 31st, as issued by the U.S. Department of Labor, Bureau of Labor Statistics.
In addition to the maintenance fees, the third-party platform hosting fees can also be increased. These increases can occur if the third-party hosting company raises its fees to Brain Balance. In such cases, Brain Balance can increase the fees charged to the licensee, but only by the amount that Brain Balance's costs have increased. Brain Balance must provide thirty days' prior notice before increasing the third-party platform fees.
This means that as a Brain Balance franchisee, your annual maintenance fees could increase over time, but those increases are capped by the CPI. You should review Exhibit B to understand the initial fees and how they are documented. Also, the fees for hosting the platform could increase if the hosting provider that Brain Balance uses raises their rates. It is important to factor in potential fee increases when projecting your operating expenses.