Under the Brain Balance agreement, who does the agreement benefit besides the parties involved?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
greement") in the form annexed hereto as Exhibit 2, which will allow FRANCHISOR to debit FRANCHISEE's bank account during the term of this Agreement for the royalties due.
6.02. Advertising Fund
- (a) FRANCHISEE shall participate and contribute to the advertising fund ("Advertising Fund") that has been established by COMPANY for the benefit of all BBF franchisees and Company-operated Centers.
- (b) FRANCHISEE's non-refundable contribution to the Advertising Fund shall be in an amount equal to two percent (2%) of Gross Revenue as defined in 6.01, with a minimum of $200 due monthly hereunder, and the contribution is due and payable in the same manner and at the same time as the Royalty. If the Center is not opened by the tenth (10th) month following the date of the Franchise Agreement, FRANCHISEE will be required to pay to COMPANY the contribution to the Advertising Fund beginning that month.
- (c) Contributions to the Advertising Fund from FRANCHISEE and all other franchisees shall be maintained by COMPANY in a single segregated account designated for that purpose. The proceeds of the Advertising Fund shall be expended at the discretion of COMPANY for national and/or regional advertising, public relations, dissemination of research results achieved through approved research facilities, the Brain Balance® Foundation and other charitable activities, Web site and other electronic media development, and/or promotion of the Center businesses conducted under the Marks and publications relating to the Brain Balance Program®, and the payment of fees, costs, and other charges pertaining to such activities, including but not limited to COMPANY's administrative expenses associated with the foregoing.
- 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 franch
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, the advertising fund established by Brain Balance benefits all Brain Balance franchisees and company-operated centers. The purpose of this fund is to maximize general public awareness of the Brain Balance Program for the benefit of the entire Brain Balance system.
Franchisees are required to contribute to this advertising fund. The contribution is non-refundable and is equal to 2% of gross revenue, with a minimum of $200 due monthly. This contribution is due at the same time as royalty payments. If a Brain Balance center is not opened by the tenth month following the franchise agreement date, the franchisee must still begin contributing to the advertising fund at that time.
Brain Balance maintains the advertising fund in a single, segregated account. The company has the discretion to use the funds for national or regional advertising, public relations, research dissemination, charitable activities through the Brain Balance Foundation, website and electronic media development, and promotion of Brain Balance centers. However, the FDD stipulates that franchisees are not considered third-party beneficiaries of the advertising fund and have no right to enforce contribution obligations. This means that while the fund is intended to benefit the system as a whole, individual franchisees have no guarantee of direct benefit or proportionate advertising in their specific area.