How is the minimum monthly royalty fee for a Brain Balance franchise adjusted over time?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
the Center is not opened within nine (9) months following the date of the Franchise Agreement, FRANCHISEE will be required to pay to COMPANY the minimum Royalty beginning with the first of the month the following calendar month.
The Royalty shall be an amount equal to eight percent (8%) of FRANCHISEE's Gross Revenue (as defined below) ("GR") in the operation of the Franchised Business, with a minimum of $1,000 due and payable each month. If the thirtieth day falls on a day other than the first day of the month, the minimum royalty amount will be prorated for the number of days the Center was open in that month. Said minimum monthly Royalty of $1,000 shall be increased each January 1st by the same percentage that the Consumer Price Index, issued by the U.S. Department of L
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the minimum monthly royalty fee is subject to an annual adjustment based on the Consumer Price Index (CPI). Specifically, the initial minimum monthly royalty of $1,000 will be increased each January 1st. The percentage increase will match the percentage increase in 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, over the CPI as of the date the Franchise Agreement is signed.
For a prospective Brain Balance franchisee, this means that the minimum royalty payment will likely increase over time due to inflation. The exact amount of the increase will depend on the CPI changes in the N.Y.-Northeastern N.J. region, which may or may not reflect the franchisee's specific local economic conditions. This CPI adjustment ensures that Brain Balance's royalty income keeps pace with inflation, but it also means that franchisees need to budget for potential increases in their monthly royalty obligations.
It's important to note that this adjustment applies only to the minimum royalty fee. The actual royalty is calculated as eight percent of the franchisee's gross revenue. If eight percent of gross revenue exceeds the adjusted minimum royalty, the franchisee will pay the higher amount. Therefore, the CPI adjustment primarily affects franchisees whose gross revenue is relatively low, as they are more likely to pay the minimum royalty fee.