How are software fees for a Brain Balance franchise paid?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
g expenses are accrued up to the amount of revenue to be utilized in the subsequent year. As of December 31, 2024, 2023, and 2022, $77,535, $133,665, and $232,489, respectively, was included in advertising fund accrued expenses. The amount of cash restricted for advertising fund expenses at December 31, 2024, 2023, and 2022 was $83,542, $134,030, and $121,060, respectively.
Payment Terms
Initial franchise, renewal, and transfer fees are due and typically paid when a franchise agreement is executed and are nonrefundable. Royalties and advertising fees are paid on a monthly basis based upon a percentage of franchisee gross sales. Software fees are paid on a monthly basis based upon a fixed amount defined within the franchise agreement. Enrollment kit fees are paid on a monthly basis based on the number of kits ordered. Coaching fee revenue is due after the coaching is provided and is invoiced net 30. Annual conference fees are typically prepaid upon registering. Settlement fees are due upon signing the settlement agreement. Franchise fees are collected prior to the satisfaction of the Company's performance obligation, resulting in the Company recognizing deferred revenue contract liabilities. Amounts that are expected to be recognized as revenue within one year are classified as current deferred revenue in the balance sheet. Deferred franchise revenue and deferred software licenses as of January 1, 2022 were approximately $287,000 and $226,000, respectively.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, software fees are paid on a monthly basis. The amount due each month is a fixed amount that is defined within the franchise agreement. These fees are part of the variable consideration that Brain Balance receives, which also includes royalties and advertising fees.
For a prospective Brain Balance franchisee, this means that a consistent, predictable software fee will be due each month. This fixed cost helps in budgeting and financial forecasting. The franchisee should carefully review the franchise agreement to understand the exact fixed amount they will be paying for software fees monthly.
The FDD also indicates that Brain Balance recognizes revenue related to software fees over the term of the franchise agreement as the underlying sales occur. This accounting practice aligns the revenue recognition with the ongoing provision of software and technology services to the franchisee.