Brain Balance Franchise Costs: Estimated Initial Investment (Item 7, 2022 FDD)
1. Initial Franchise Fee: $45,000
2. Computer Software Program License Fee: $15,000
3. In Center Program Kits: $1,750 (7 kits)
4. Virtual Program Kits: $1,275 each (3 kits)
- You are required to purchase a minimum supply of program kits as initial inventory. Brain Balance recommends that you purchase 3 virtual program kits and 7 in center kits.
- As you enroll families, you will need to purchase more as every enrollment requires a program kit.
5. Third-Party Program Pass Through Fees: $3,250
- You will pay Brain Balance $1,596 annually for its proprietary software system, plus additional fees for third-party software. Brain Balance’s estimate is the amount it will collect before you open.
6. Business License (if necessary), Incorporation, etc.: $250 to $2,500
- You need to retain an accountant, attorney, and other consultants.
7. Real Property (2 months security): $8,335 to $20,835
- At least 1,500 square feet of usable square footage will be needed to operate your Franchised Business. You do not need a space larger than 2,500 square feet, and Brain Balance’s estimate is based on a space between 1,500 and 2,500 square feet.
- The cost per square foot of leasing commercial space varies considerably depending upon the Center location and market conditions. The cost of leasing commercial space is estimated to be between $10 and $50 per square foot, but may be higher in major metropolitan areas.
- Non-commercial space would need to be approved through Brain Balance.
8. Utility Deposits and Fees: $3,500 to $4,000
9. Insurance: $4,200 to $6,000 per calendar year, depending upon location
- The figures in the chart are based upon the estimated average premiums calculated by the insurance brokers designated by Brain Balance who have negotiated rates with carriers nationally as first year’s premium for Commercial General Liability and Professional Liability coverage, including, but not limited to, education services ($1,000,000 per occurrence and $3,000,000 in the aggregate); commercial automobile liability insurance covering vehicles that are owned, non-owned, or hired by the Franchised Business, providing bodily injury and property damage, Employment Practices Liability Insurance (“EPLI”), and workers’ compensation and disability insurance, if required.
10. Construction and Remodeling, Including Architect Design: $50,000 to $160,000
- Brain Balance’s estimate for construction costs is based on you following the recommended build-out guidelines for a leased space of the square footage it recommends. If you choose to upgrade to more luxurious building finishes than Brain Balance recommends, or if you lease and build out a significantly larger space, your cost may exceed these estimates.
- These estimates are based on build-out costs as reported to Brain Balance by franchisees for Centers that opened 2019-2021. During this time, franchisees received an average of approximately $61,000 in Tenant Improvement Credits (“TI”), and Brain Balance has factored that into its costs. Franchisees reported TI ranging from zero to $165,000.
- The cost per square foot during this time had both an average and median of $35/sq. foot (excluding TIs), and the range was as low as $6 and as high as $70.
- Approximately 32% of all build-outs were less than $20 per square foot. 24% were $20-$40 per square foot, 32% were $40-$60 per square foot, and 12% of franchisees chose to spend more than $60 per square foot.
11. Furniture, Inventory, and Equipment (Lease Deposit and Installation): $50,000 to $65,000
- This expense includes copier/scanner/fax, telephone equipment, desks, chairs, file cabinets, program inventory, supplies, the Customer Relationship Management Invoicing System and miscellaneous equipment, and estimated telephone company deposits.
- The items associated with the program inventory and supplies will need to be purchased; most cannot be leased.
- Assumes all furniture and equipment are purchased.
12. Technology Costs: $24,000 to $27,000
- You may obtain your office computer hardware from any reputable supplier.
- You must ensure that all programs and applications running on your computer are legally licensed and that you have up-to-date anti-virus software installed on each machine.
- The fee reflects the approximate cost to purchase the equipment; you may also hire an information technology (IT) system administrator to help you with the installation and configuration of your network, firewall, and Internet access.
- Brain Balance will provide support regarding any IT issue related to the software you are using in connection with the Brain Balance Program (CRM or email, for example), but you will be responsible for computer hardware, Internet access, other software installed, and security, which includes ensuring that your location is PCI compliant.
13. Start-up Supplies: $4,500 to $5,000
- Brain Balance estimates that the range given will be sufficient to cover general office supplies, such as files, folders, paper, and writing utensils for the first 3 months of the operation of the Franchised Business.
- Brain Balance has created brand identity for marketing and advertising materials that must be purchased from an approved vendor.
14. Signage: $9,000 to $13,000
15. Call Center: $1,300 to $1,500
- If you enroll with Brain Balance’s Internal Call Center (ICC), you will pay approximately $350 per month for the service, $75 per assessment, and $20 for a consultation that becomes an assessment, plus an initial setup fee of $250.
- As an alternative to using Brain Balance’s Internal Call Center, you may use an approved third-party call center, or employ an experienced sales person, who will be solely responsible for responding to incoming leads, provided you obtain Brain Balance’s prior written approval.
- Brain Balance’s estimate includes only the cost of monthly enrollment in a Call Center. Costs for leads and assessments are included in Brain Balance’s estimate of Additional Funds.
16. Brain Balance Program CRM System and Annual Maintenance: each Center License will cost $1,596/year
- The Brain Balance Program Customer Relations Management System enables you to track leads, assessments, enrollments, and customer service inquiries, and to prepare operations reports and to access a centralized Help Desk.
17. Credit Card System: $0 to $350
- The cost to implement a credit card processing system varies based on the vendor you choose. Some vendors will waive fees to acquire the hardware, while others will charge you an implementation fee and an annual PCI compliance fee.
- In addition to the cost to set up your credit card processing system, you will incur transaction fees when you accept credit card payments. Brain Balance expects that the merchant services agreement transaction fee will be no greater than 2% generally, 2.5% for debit cards, and 2.9% for American Express.
18. Email and Other Collaboration Tools: $0 (first 3 users are free of charge, additional users are $94/year)
19. Workplace: $30 to $75 ($15/year per user)
20. Accounting Software and Bookkeeping: $1,500 to $1,800
- You are required to acquire and use an accounting software that meets Brain Balance’s standards (currently QuickBooks), which you may either purchase or license on a monthly basis.
- In addition, Brain Balance will require you to use the services of a professional bookkeeper for at least the first 6 months of operation that must be approved by Brain Balance. In Brain Balance’s discretion, it can continue to require you to use a professional bookkeeping service.
21. Additional Funds: $100,000 to $150,000
- Capital will be needed to support on-going expenses, such as payroll, office rental expenses, cleaning service and supplies, repairs and maintenance, postage, credit card fees, advertising beyond the $5,000 local advertising minimum, supplies, phones, utilities, and miscellaneous expenses, to the extent your collected revenue does not cover these costs.
- The numbers provided are only estimates, and it is possible that additional working capital will be necessary during this time period.
22. Pre-Opening Travel and Training Costs: $5,000 to $7,000
- These costs will vary significantly depending on the distance traveled and the type of accommodations selected.
23. Pre-Opening Advertising: $10,000 to $15,000
- Prior to opening the Franchised Business, you will need to advertise for available staff positions as well as the opening of your franchise Center within your community.
24. Total of All Initial Investment Costs: $339,486 to $583,431
- Brain Balance does not finance your initial investments. You may be able to obtain financing from third parties for these expenses.
- Some states impose sales and use taxes on goods and services. If your Center will be in one of these states, you may have an added expense for taxes.