What was the net income or loss for Brain Balance in 2024?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
Assignment is binding upon and inures to the benefit of the parties hereto and their respective successors, heirs, representatives, and permitted assigns.
| Contributions | 539,393 | |---|---| | Balance - December 31, 2024 | $203,309 |
EXHIBIT 6 SECTION 16.07
OWNER'S GUARANTY AND ASSUMPTION OF FRANCHISEE'S OBLIGATIONS
| | Years Ended December 31, 2024, 2023, and 2022 | | | | |---|---|---|---|---| | | 2024 | 2023 | 2022 | | | Cash Flows from Operating Activities | | | | | | Net (loss) income | $(324,837) $ | 161,876 $ | 307,374 | | | Adjustments to reconcile net (loss) income to net cash and | | | | | | restricted cash from operating activities: | | | | | | Depreciation and amortization | 49,819 | 29,920 | 24,806 | | | Credit loss expense | 59,741 | 5,560 | - | | | Changes in operating assets and liabilities that (used) | | | | | | provided cash and restricted cash: | | | | | | Accounts receivable | (126,097) | 42,623 | (75,804) | | | Deferred franchise costs | 20,050 | 23,393 | 19,952 | | | Prepaid expenses and other assets | (33,382) | (10,615) | 53,332 | | | Accounts payable and accrued expenses | (66,584) | (46,246) | 81,063 | | | Deferred revenue | 16,809 | (89,332) | (96,172) | | | Accrued advertising expenses | (56,130) | (98,824) | 84,461 | | | Net cash and restricted cash (used in) provided | | | | | | by operating activities | (460,611) | 18,355 | 399,012 | | | Cash Flows from Investing Activities | | | | | | Issuance of notes receivable | (61,946) | - | - | | | Purchases of website and software development assets | (52,423) | (146,179) | (41,022) | | | Payments on notes receivable | 31,221 | - | 20,000 | | | Net cash and restricted cash used in investing | | | | | | activities | (83,148) | (146,179) | (21,022) | | | Cash Flows from Financing Activities | | | | | | Advance to related party | | - | - | (422,848) | | Payments on debt | (3,515) | (7,507) | (3,006) | | | Member contribution | 539,393 | 109,029 | - | | | Net cash and restricted cash provided by (used | | | | | | in) financing activities | 535,878 | 101,522 | (425,854) | | | Net Decrease in Cash and Restricted Cash | (7,881) | (26,302) | (47,864) | | | Cash and Restricted Cash - Beginning of year | 155,826 | 182,128 | 229,992 | | | Cash and Restricted Cash - End of year | $147,945 $ | 155,826 $ | 182,128 | | | Classification of Cash and Restricted Cash | | | | | | Cash | $64,403 $ | 21,796 $ | 61,068 | | | Restricted cash | 83,542 | 134,030 | 121,060 | | | | $147,945 $ | 155,826 $ | 182,128 | | | Total cash and restricted cash | | | | | | Supplemental Cash Flow Information - Cash paid for interest | $5,988 $ | 5,671 $ | 5,784 | | | Significant Noncash Transactions - Amounts advanced to | | | | | | related parties in 2022 and reclassified as distributions in 2022 | $ | - $ | - $ | 422,848 | hereby personally and unconditionally: (1) guaranties to FRANCHISOR and its successors and assigns, for the term of the Agreement and thereafter as provided in the Agreement; and agrees to punctually pay and perform each and every undertaking, agreement and covenant set forth in the Agreement, and (2) agrees to be personally bound by, and personally liable for the breach of, each and every term, condition, covenant and provision in the Agreement. Each Guarantor expressly represents and acknowledges that he or she has read the Agreement and has had the opportunity to review the same, and this Guaranty, with counsel. Each Guarantor hereby expressly waives:
- (1) acceptance and notice of acceptance by FRANCHISOR, of the foregoing undertakings;
- (2) notice of demand for payment of any indebtedness or non performance of any obligations hereby guaranteed;
- (3) protest and notice of default to any party with respect to the indebtedness or nonperformance of any obligations hereby guaranteed;
- (4) any right he or she may have to require that an action be brought against FRANCHISEE, Guarantor or any other person as a condition of liability;
- (5) any requirement that FRANCHISOR proceed against or exhaust its remedies with respect to FRANCHISEE or any other person before demanding payment or performance by Guarantor; and
- (6) any and all other notices and legal or equitable defenses to which he or she may be entitled. Each Guarantor consents and agrees that:
- (1) his or her direct and immediate liability under this guaranty shall be joint and several;
- (2) he or she shall render any payment or performance required under the Agreement upon demand if FRANCHISEE fails or refuses to do so punctually;
- (3) such liability shall not be contingent or conditioned upon pursuit by FRANCHISOR of any remedies against FRANCHISEE or any other person;
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the company experienced a net loss of $324,837 in 2024. This figure is derived from the cash flow statement, which reconciles net loss to net cash used in operating activities. It's important to note that this loss is after adjustments for items like depreciation and amortization ($49,819), credit loss expense ($59,741), and changes in various operating assets and liabilities. These adjustments are typical in financial statements to provide a clearer picture of cash flow from operations.
Additionally, the FDD provides a breakdown of Brain Balance's revenue and operating expenses for 2024. Total revenue amounted to $5,834,704, while total operating expenses reached $6,210,169, resulting in an operating loss of $375,465. Other income, including $56,616, partially offset this loss, but the company still ended the year with the previously mentioned net loss of $324,837. This information is crucial for prospective franchisees to understand the overall financial performance of Brain Balance.
It is important for potential franchisees to note that the financial results presented in the FDD are for BB Franchising, LLC, a wholly-owned subsidiary of Brain Balance Holdings, Inc. The FDD explicitly states that the operating results could significantly differ if the company operated independently of its parent. Therefore, prospective franchisees should consider this affiliation and related party disclosures when reviewing the financial statements. They should also conduct their own independent investigation of the costs and expenses they will incur in operating a Brain Balance center, as the financial performance representation does not reflect all costs required to obtain net income or profit.