What is the maximum amount by which Brain Balance can increase the Maintenance Fees?
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, the Maintenance Fees can be increased by Brain Balance from time to time following the initial twelve-month period. However, any increase in Maintenance Fees cannot exceed the CPI (Consumer Price Index) increase with respect to the year prior to such increase. 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.
For a prospective Brain Balance franchisee, this means that while the franchisor can raise the maintenance fees, the increase is capped by the CPI. This provides some predictability and limits the potential for large, unexpected increases in this particular fee. Franchisees should monitor the CPI to anticipate potential changes to their maintenance fees.
This type of CPI-linked increase is a fairly common practice in franchising, as it allows the franchisor to adjust fees to account for inflation and rising costs, while also providing franchisees with a degree of protection against excessive fee hikes. Franchisees should review Exhibit B of the Franchise Agreement, as referenced in the quote, to understand the initial Maintenance Fees and how they are applied.