What interest rate limitations apply to California Brain Balance franchisees?

According to Brain Balance's 2025 Franchise Disclosure Document, any interest rate charged to a franchisee operating in California must adhere to the state's constitution. This means the interest rate cannot exceed the higher of two possible limits. The first limit is a fixed rate of 10% per year. The second limit is calculated as 5% per year plus the prevailing interest rate that the Federal Reserve Bank of San Francisco charges to banks.

This regulation is outlined in the California Addendum to the Franchise Agreement, which supersedes any conflicting terms in the standard agreement. This ensures that California franchisees benefit from the protections afforded by California law, regardless of what the standard Brain Balance franchise agreement might state.

For a prospective Brain Balance franchisee in California, this is a beneficial protection. It ensures that any financing or payment arrangements with Brain Balance or its affiliates will be subject to a reasonable interest rate cap, preventing potentially predatory lending practices. Franchisees should confirm the current prevailing interest rate charged to banks by the Federal Reserve Bank of San Francisco to understand the specific interest rate ceiling at the time of any financial agreement.