Is a Brain Balance franchisee considered a third-party beneficiary with respect to the Advertising Fund?

According to Brain Balance's 2025 Franchise Disclosure Document, a franchisee is not considered a third-party beneficiary with respect to the Advertising Fund. The document explicitly states that neither the franchisee nor any other Brain Balance franchise owner who contributes to the Advertising Fund has any right to enforce any obligation related to it. This means that franchisees cannot legally challenge or control how Brain Balance manages or spends the advertising funds.

This stipulation has significant implications for prospective Brain Balance franchisees. While franchisees are required to contribute to the Advertising Fund, they have no guarantee that the funds will be used in a way that directly benefits their specific location or territory. Brain Balance retains sole discretion over how the advertising funds are spent, including the nature, scope, content, and territory of advertising and promotion programs.

This arrangement is not uncommon in franchising, as franchisors often maintain control over advertising to ensure brand consistency and maximize overall system benefits. However, it's crucial for franchisees to understand that their contributions may not always translate into direct, measurable benefits for their individual business. Franchisees are also obligated to spend a minimum of $6,000 per calendar month or 9% of gross revenue, whichever is greater, on local advertising, giving them some control over marketing efforts in their immediate area.