Is there any guarantee that a Brain Balance franchisee will directly benefit from expenditures from the Advertising Fund?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE acknowledges that proceeds of the Advertising Fund are intended to be used to maximize general public awareness of the Brain Balance Program® for the benefit of the System as a whole.
No representation is made by COMPANY, and FRANCHISEE acknowledges that expenditures from the Advertising Fund may not result in a proportionate or any advertising effort in a particular geographical area, including FRANCHISEE's Territory, or that FRANCHISEE will benefit directly from any expenditures from the Advertising Fund.
FRANCHISEE acknowledges and agrees that neither FRANCHISEE nor any other franchise owners of COMPANY who shall be obligated to contribute to the Advertising Fund shall be deemed a third-party beneficiary with respect to said Advertising Fund or have any right to enforce any obligation to contribute thereto.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees are required to contribute to the Advertising Fund, but there is no guarantee that they will directly benefit from its expenditures. Brain Balance intends to use the Advertising Fund to maximize general public awareness of the Brain Balance Program for the benefit of the system as a whole.
The FDD states that Brain Balance makes no representation that expenditures from the Advertising Fund will result in proportionate advertising efforts in any specific geographical area, including the franchisee's territory. This means that a franchisee's location may not see any direct advertising benefit, even though they are contributing to the fund.
Furthermore, the FDD clarifies that neither the franchisee nor any other franchise owners contributing to the Advertising Fund are considered third-party beneficiaries. This means franchisees have no legal right to enforce any obligation related to the fund. Brain Balance retains sole discretion over how the Advertising Fund is spent, including the nature, scope, content, territory, media, and budget of advertising and promotion programs. Franchisees are also obligated to spend a minimum of $6,000 per calendar month or 9% of gross revenue, whichever is greater, on local advertising, as directed by Brain Balance.