What are the specific obligations of a Brain Balance franchisee regarding the use of the proprietary software, considering the initial fee in Item 5 and the general obligations in Item 9?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
The initial uniform franchise fee for a Brain Balance® Center is $45,000 and is payable in a lump sum at the time you sign the Franchise Agreement. You are also required to license the proprietary software ("Software") from the Franchisor under the Application License Agreement pay the Franchisor $15,000 for the Software license, and pay the Franchisor a prorated amount of the $1,850 annual software maintenance fee and Customer Relationship Management System (CRM) License Fee for the balance of the first year of operation at the time the Software is activated, plus a prorated amount of the $1,000 in software fees you will pay to us for annual third party software program access.
You must license the Software/Application required for your Center by executing the Application License Agreement attached as Exhibit 1 to Exhibit A (Franchise Agreement) and as Exhibit 1 to Exhibit B (Satellite Franchise Agreement) when you execute your Franchise Agreement. The Application performs administrative functions for your Center, including collection of data relating to your customers and transmission of the data to our research facility affiliate.
We retain the right to data ownership for everything related to the Brain Balance systems, programs, and operations.
You must permit the Franchisor access to the Software/Application and its data and must perform the actions required to permit the Franchisor to communicate with the Software/Application and to access and record it and its data, including, for example, the purchase, installation, and maintenance of appropriate communication hardware and software (Franchise Agreement §15; Application License Agreement §2(a)).
To ensure secure and consistent communication, all franchisees are required to use Brain Balance's email system. Each Center will be assigned a primary email address along with two (2) additional accounts, one of which will be designated for the Center owner to receive sensitive communications.
We will also provide necessary upgrades to the Software/Applications on an ongoing basis, and, if any upgrade is provided to you, you must implement it.
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees are obligated to license proprietary software as part of their franchise agreement. This involves an initial software license fee of $15,000, payable to Brain Balance. Additionally, franchisees must pay a prorated amount of the $1,850 annual software maintenance fee and Customer Relationship Management System (CRM) License Fee for the balance of the first year of operation, along with a prorated amount of $1,000 annually for third-party software program access. These fees are due when the software is activated.
Brain Balance requires franchisees to use the software for administrative functions, including collecting customer data and transmitting it to their research facility affiliate. Franchisees must also ensure that all programs and applications running on their computer are legally licensed. While franchisees can choose their office computer hardware from any reputable supplier, they must use Brain Balance's email system to ensure secure and consistent communication. Each center is assigned a primary email address and two additional accounts, one specifically for the center owner to receive sensitive communications.
Brain Balance will provide necessary software upgrades at no additional cost, and franchisees are obligated to implement these upgrades. Franchisees must also allow Brain Balance access to the software and its data, including purchasing, installing, and maintaining appropriate communication hardware and software to facilitate this access. The Application License Agreement's term aligns with the Franchise Agreement's term, entitling the franchisee to multiple users at their center. If Brain Balance changes the operating system and contracts with a third-party software vendor, franchisees may be required to pay the software vendor directly for multiple users.
Brain Balance retains the right to data ownership for everything related to its systems, programs, and operations. The franchisor will provide support and maintenance for the proprietary software, while the franchisee is responsible for maintaining their own hardware and communication software. These obligations ensure that Brain Balance maintains control over its data and systems while providing franchisees with the necessary tools to operate their centers effectively.