Are Brain Balance franchisees considered third-party beneficiaries with respect to the Advertising Fund?

According to Brain Balance's 2025 Franchise Disclosure Document, franchisees are explicitly not considered third-party beneficiaries with respect to the Advertising Fund. The document states that neither the franchisee nor any other franchise owners who contribute to the Advertising Fund have 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 is significant for prospective franchisees because it limits their influence over a fund to which they are required to contribute. Franchisees must contribute two percent of their gross revenue, with a minimum of $200 monthly, to the Advertising Fund. However, Brain Balance retains sole discretion over how these funds are spent, including for national or regional advertising, public relations, website development, and charitable activities.

Brain Balance also clarifies that advertising expenditures may not result in proportionate advertising efforts in a franchisee's specific geographical area or guarantee direct benefits to the franchisee. This lack of control and guaranteed return on investment from the Advertising Fund is a crucial consideration for anyone evaluating a Brain Balance franchise. Franchisees are essentially entrusting Brain Balance to make decisions that benefit the system as a whole, without any assurance of direct local impact.

This arrangement is not uncommon in franchising, where franchisors often maintain control over advertising funds to ensure brand consistency and strategic alignment. However, the explicit denial of third-party beneficiary status underscores the importance of a franchisee's confidence in Brain Balance's management and marketing strategies. Prospective franchisees should carefully evaluate Brain Balance's track record and plans for the Advertising Fund to determine if they are comfortable with this arrangement.