What is included in the definition of 'Gross Revenue' for a Brain Balance franchise, and what deductions are allowed?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
"Gross Revenue (GR)" is defined as all sums received by FRANCHISEE resulting directly or indirectly from services provided pursuant to the operation of the Franchised Business without deductions of any kind other than refunds. "GR" shall exclude the transactional credit card service fees negotiated by COMPANY and sales tax, excise tax, or other similar taxes received by FRANCHISEE. COMPANY has negotiated a discount credit card service fee with a credit card clearing house service provider, which will be the maximum service fee deducted from GR arising out of credit card purchases regardless of whether FRANCHISEE participates in this program. Credit card expenses such as machinery, equipment, and connection charges will not be excluded from GR. GR shall also exclude Program Kits Fees and Loan Fees deducted by lending vendors.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, Gross Revenue (GR) is defined as all sums received by the franchisee resulting directly or indirectly from services provided through the operation of the franchised business. This definition is comprehensive, encompassing virtually all income streams related to the Brain Balance center's activities.
However, there are specific deductions allowed from this broad definition of Gross Revenue. Franchisees are permitted to exclude refunds, transactional credit card service fees negotiated by Brain Balance, sales tax, excise tax, and other similar taxes received. Additionally, Program Kits Fees and Loan Fees deducted by lending vendors are also excluded from Gross Revenue. The FDD specifies that Brain Balance has negotiated a discount credit card service fee with a credit card clearing house service provider, which will be the maximum service fee deducted from GR arising out of credit card purchases regardless of whether FRANCHISEE participates in this program.
It is important to note that while certain credit card service fees are deductible, other credit card expenses such as machinery, equipment, and connection charges are not excluded from Gross Revenue. This distinction highlights the importance of understanding precisely which deductions are permissible when calculating the royalty and advertising fund contributions. Franchisees should carefully track their revenue and expenses to ensure accurate reporting and compliance with the franchise agreement.