Can Brain Balance increase the annual maintenance fees, and if so, what is the limitation on the increase?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
3. Charges and Fees.
- (a) License Fee for Software. Licensee shall pay to Licensor upon execution hereof and thereafter on each anniversary of the Effective Date the annual license fee specified in Exhibit B.
- (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, Brain Balance may increase the annual maintenance fees for franchisees. This increase can occur from time to time following the initial twelve-month period of the agreement.
The increase in maintenance fees is limited to the increase in the Consumer Price Index (CPI). The CPI is defined as 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.
This means that while Brain Balance can raise the maintenance fees, the amount of the increase is capped by the CPI, providing some predictability for franchisees in budgeting for these fees. Franchisees should monitor the CPI to anticipate potential changes in their maintenance fees.