What is the minimum gross revenue a Brain Balance franchise must achieve to avoid termination?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) FRANCHISEE's non-refundable contribution to the Advertising Fund shall be in an amount equal to two percent (2%) of Gross Revenue as defined in 6.01, with a minimum of $200 due monthly hereunder, and the contribution is due and payable in the same manner and at the same time as the Royalty.
If the Center is not opened by the tenth (10th) month following the date of the Franchise Agreement, FRANCHISEE will be required to pay to COMPANY the contribution to the Advertising Fund beginning that month.
(j) FRANCHISEE is in breach of any of the terms or conditions of the Software Agreement;
(k) FRANCHISEE is in breach of any of the agreements with supplier(s) designated by COMPANY for purchase of equipment, advertising materials, services or other supplies, products, and materials required for the operation of the Franchised Business; or
(l) FRANCHISEE abandons, fails to renew, or otherwise loses the right to operate or stops operating the Standard Brain Balance Center and fails to convert the Franchised Business into a standard Brain Balance Center within a period of 30 days from the date of non-operation of the Standard Brain Balance Center.
17.03. (a) Upon the occurrence of an Event of Default, COMPANY, at its option, may terminate this Agreement on five (5) days' written notice (or a notice for a longer period of time as may be required by the law of the jurisdiction in which FRANCHISEE's Center is located) without a right to cure, and this Agreement, together with the Franchise granted hereunder, shall thereupon expire.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, a franchisee's minimum gross revenue is not explicitly tied to the termination of the franchise agreement. However, franchisees are required to contribute to the advertising fund.
Specifically, Brain Balance franchisees must contribute 2% of their gross revenue to the advertising fund, with a minimum monthly payment of $200. This contribution is due at the same time as royalty payments. If a Brain Balance center is not opened by the tenth month following the franchise agreement date, the franchisee must begin contributing to the advertising fund at that time.
While failure to meet a specific gross revenue target does not automatically trigger termination, failure to pay the advertising fund contributions could potentially lead to a breach of contract. The FDD states that a franchisee can be in default if they breach any agreements with suppliers designated by Brain Balance or breach the software agreement. A franchisee may also be in default if they abandon the Brain Balance center. If a franchisee is in default, Brain Balance may terminate the agreement with only five days written notice.