Does Brain Balance generally require collateral to support accounts receivable from its franchisees?

According to Brain Balance's 2025 Franchise Disclosure Document, Brain Balance generally does not require collateral to support accounts receivable from its franchisees. The company grants credit to franchisees in the normal course of business and periodically performs credit analyses and monitors their financial condition to reduce credit risk. While Brain Balance performs ongoing credit evaluations of its franchisees, it typically does not mandate collateral to secure accounts receivable.

This policy means that franchisees are not usually required to pledge assets as security for amounts owed to Brain Balance. This could be seen as a benefit for franchisees as it reduces the burden of providing collateral, which can tie up assets and limit financial flexibility. However, it also implies that Brain Balance bears a higher level of risk in case of franchisee default, which is mitigated by their ongoing credit evaluations and monitoring processes.

Prospective franchisees should be aware that while collateral is not generally required, Brain Balance does perform credit analyses and monitors the financial condition of its franchisees. This suggests that Brain Balance actively manages its credit risk by assessing the financial health of its franchisees and taking appropriate measures to mitigate potential losses. Franchisees should maintain good financial standing to ensure smooth business operations and avoid potential credit-related issues with Brain Balance.