FDD Talk 2017: What You Need to Know About the Brain Balance Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

In this FDD Talk 2017 post, you’ll learn the following:

• Section I – Background information on the Brain Balance franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Brain Balance franchise, based on Item 7 of the company’s 2017 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Brain Balance franchise, based on Items 5 and 6 of the company’s 2017 FDD

• Section IV – Presentation and analysis of Brain Balance’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:

• 2014, 2015, and 2016 average, maximum, minimum, median, and total gross sales for all franchisee-owned Brain Balance Centers that were open for the entire 2014, 2015, and 2016 calendar year, respectively

• 2014, 2015, and 2016 actual annual gross sales for the Top 10 franchisee-owned Brain Balance Centers that were open for the entire 2014, 2015, and 2016 calendar year, respectively

• 2014, 2015, and 2016 average, maximum, minimum, median, and total gross sales for the Top Third, Middle Third, and Bottom Third of franchisee-owned Brain Balance Centers that were open for the entire 2014, 2015, and 2016 calendar year, respectively

Section I – Background Information

12 Things You Need to Know About the Brain Balance Achievement Centers Franchise

First Location Celebrates 10th Anniversary

1.  Brain Balance Peachtree City, the first Brain Balance Achievement Center to be opened, celebrated its 10th anniversary in early September. The center, which has helped more than 1,365 students since it opened, invited families to a celebration that included a bounce house, face painting, temporary tattoos, games, and a tour of the center.

New Locations

2. Brain Balance has opened two new centers so far in 2017, one in Wichita, Kansas and the other in Windsor, Colorado.

3.  Brain Balance Wichita opened in May and is owned by Michelle Robertson and Amy Downing. Robertson and Downing didn’t know each other prior to being matched by the company, but both had looked into owning a Brain Balance center. Fortunately, they “really hit it off.”

4.  Both women have a family member who has had success with the Brain Balance Program and they wanted to open a center in Wichita because they know of other local families who have to travel far several times a week to access the closest center.

5.  Robertson and Downing have expressed interest in opening a second location in the west side of Wichita due to the division between the city’s east and west sides.

6.  The Windsor, Colorado Brain Balance Achievement Center opened in May and the company’s founder, Dr. Melillo, appeared on the Colorado and Company morning show to promote the center’s grand opening. He announced that the center would be offering a free event so that local parents and teachers could better understand The Brain Balance Program.

Link Between Nutrition and Brain Development

7.  Due to the nature of The Brain Balance Program and the claims by founder Dr. Melillo that his method can “cure” children with learning and behavioral issues, both he and his learning centers have drawn criticism for its claims and the lack of scientific evidence to support them.

8.  While many people in the scientific community criticize Brain Balance, they do agree with the company that nutrition plays an important role in how the brain develops and functions. One of Brain Balance’s many claims is that there is a direct link between gluten intolerance and neurobehavioral issues.

9.  According to Dr. Melillo, “Gluten plays a very large role in many neurobehavioral issues. For example, children with ADHD do not respond positively to wheat. Also, in autistic children, their brains produce too much glutamate which results in gastrointestinal problems.”

Company History

10.  Brain Balance Achievement Centers was founded in 2007 by Dr. Robert Melillo, whose work concerning children with learning and behavioral issues began in the early 1990s. Melillo’s research led him to a clearer understanding of disorders like ADHD, Dyslexia, Processing Disorders, and Autism Spectrum Disorders. He believes that these disorders are caused by an underlying problem in the brain called “Functional Disconnection Syndrome.”

11.  After coming to this conclusion, Melilllo developed a program that would help these developmentally-challenged children. He spent over a decade refining his program and began marketing it in 2006 and named it the Brain Balance Program.

12.  With the help of William Fowler, a pioneer in business development and a veteran of Wall Street, Melillo opened the first Brain Balance Achievement Center in 2007 and began franchising that same year. Today, there are over 100 Brain Balance Achievement Centers in the U.S.

Entrepreneur’s Franchise 500

13.  Although Brain Balance Achievement Centers has been franchising for over a decade, the company has never appeared on Entrepreneur’s annual Franchise 500 list

Section II – Estimated Costs

• Please click here for detailed estimates of Brain Balance franchise costs, based on Item 7 of the company’s 2017 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Brain Balance’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.

Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis

• Brain Balance is providing historical revenue information (without including expense items) for all franchisee-owned Centers that were open for the entire year for each year stated below.

• The first chart shows the highest performing Center, the lowest performing Center, the average performance of the full group, and the median Gross Revenue number for the group for each year. The total number of Centers that were open for the entire year is shown as “Count.”

• The second chart shows the top ten performing Centers by Gross Revenue for each year.

• The third chart shows each group for each year, divided into performance categories.

• The numbers provided in this Item 19 were compiled from the voluntary reporting information that the franchisees provided to Brain Balance pursuant to the Franchise Agreement or, in a few instances, from the results of an audit Brain Balance conducted of a particular Center’s financials. In general, these revenue numbers have not been verified by Brain Balance or independently audited.

• A new franchisee’s individual financial results may differ from the results provided below.

• The earnings claims figures do not reflect the costs of sales, operating expenses, or other costs or expenses that must be deducted from the gross revenues or gross sales figures to obtain your net income or profit.

Part 1 – Gross Sales (Whole Group)

2014