FDD Talk: How Much Does a Brain Balance Franchise Make (Average Revenues and/or Profits)?

In this FDD Talk 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 2021 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 2021 FDD

• Section IV – Number of franchised and company-owned Brain Balance outlets at the start of the year and the end of the year for 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD

• Section V – Presentation and analysis of Brain Balance’s financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:

• 2020 average, maximum, minimum, median, and total gross sales for all franchisee-owned Brain Balance Centers that were open for the entire 2020 calendar year

• 2020 actual annual gross sales for the Top 5 and Bottom 5 franchisee-owned Brain Balance Centers that were open for the entire 2020 calendar year

• 2020 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 2020 calendar year

Section I – Background Information

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

Launches Virtual Program Nationwide

1.  In early October 2020, Brain Balance Achievement Centers announced the nationwide launch of their virtual program. The program is a three-month, at-home program that builds progressively as students go along, providing the building blocks needed to help kids with ADHD and autism find success in the classroom and relief at home.

2.  Dr. Rebecca Jackson, vice president of outcomes and programs for Brain Balance Achievement Centers, said, “COVID-19 has undoubtedly had a devastating impact on all walks of life, particularly children, who are feeling the effects on their mental health and ability to focus and learn. We are thrilled to finally be able to provide a program for families who either live too far from a center or feel more comfortable with an at-home program while providing the same personalized offerings as our in-center program.”

3.  The Brain Balance Program takes a non-medical approach to improving cognitive skills, with the goal of creating lasting improvement in a child’s attention, behavior, anxiety, and academics. The personalized, virtual option uses a comprehensive set of protocols including cognitive exercises, sensory motor engagement, nutritional counseling, and academic activities.

4.  Every Brain Balance virtual program begins with an assessment to gauge students’ abilities. A customized program is then created that focuses on strengthening cognitive performance. After the customized program is developed, a comprehensive kit will be mailed to each student that includes balance, sensory engagement, fine motor skills, and timing and coordination components needed for the at-home exercises.

5.  The robust program also incorporates iPad-based cognitive games, critical listening, and comprehension activities, and meetings with a nutritionist to create a tailored nutrition plan for the child. In addition, enrollees have access to a broad selection of on-demand resources, including nutritional content and guided videos through Brain Balance’s Program Portal. All of this is supported by a dedicated Certified Cognitive Coach, who provides regular one-on-one virtual support for the child and parents over video chat.

6.  The Brain Balance virtual program is an outlet that helps students to get up and move throughout the day. While parents and children face an array of obstacles adjusting to the day-to-day changes that the pandemic has brought, the program aims to alleviate some of the struggles associated with the virtual learning process.

7.  According to Vanita Keeter, Brain Balance parent, “While researching resources for parents of children with ADD, I came across the Brain Balance virtual program and got very excited and wanted to jump right in. But then, I became apprehensive about whether or not our son would actually participate. He is 13, and we had already been struggling while homeschooling during quarantine – I did not want another battle. We eventually decided to move forward and had him try the exercises and he seemed to enjoy them. I particularly loved that we could stagger them throughout the day.”

8.  “After a few weeks, we both started noticing a positive change in his frustration levels. My son seemed able to tolerate small frustrations better. There were a few days that got difficult, but they were few and far between. Our family has truly benefited from the knowledge and wisdom shared by Brain Balance’s virtual program and team,” said Keeter.

The Ideal Franchisee

9.  Brain Balance Achievement Centers’ blog highlighted what the company is looking for in a potential franchisee. According to Brain Balance, the company attracts a lot of physical therapists and chiropractors, but specific career backgrounds don’t matter nearly as much as common business skills and a passion for helping kids.

10.  Franchisees with general business acumen, entrepreneurship, sales and marketing experience, and familiarity with P&Ls tend to be a good fit. One thing Brain Balance franchisees have in common is that they were drawn to the opportunity to help kids through the brand’s program.

11.  Brain Balance’s top performers share the following characteristics:

• Genuinely enjoy working with children;
• Educated;
• Good listeners and communicators;
• Like to work independently in a structured environment;
• Think and act like a small-business owner;
• Are ambitious and dedicated to growing their business;
• Possess integrity, honesty, and good common sense;
• Financially, qualified candidates must have a minimum net worth of $400,000 and liquid assets of at least $100,000.

12.  The key to success with a Brain Balance franchise is the ability to go out and become part of the local community. Franchisees don’t need specialized training or a background in education or developmental delays. What they need in order to thrive is a commitment to community outreach and education, and pride in both their business and the difference they make in other people’s lives.

13.  Brain Balance’s holistic, whole-child approach is based on decades of research. The brand just needs passionate entrepreneurs who can follow the program and the franchise systems. Many franchisees are parents whose own children found success through Brain Balance, and were inspired to become owners to help other families achieve the same thing.

14.  Franchisees can also rely on corporate support from Brain Balance throughout the ramp-up of their business, from site development and initial training through soft opening, grand opening, and beyond. They also receive operational support on a regular basis for the duration of their franchise agreement.

15.  Some of the training and support structures Brain Balance has in place include:

• 12-week initial training plan (5 weeks pre-training, 2 weeks on-site training, 5 weeks post-training);
• Annual training convention;
• Regional training;
• Monthly program training webinars;
• Monthly nutrition training webinars;
• Brain Balance University training modules;
• Operations, programs, and marketing support;
• Service Cloud support from subject matter experts;
• Workplace online franchisee/center staff forum for discussion.

16.  The key, as a business owner, is making sure potential customers know about solutions the Brain Balance program offers. Brain Balance does this by helping new franchise owners craft an integrated marketing plan, which includes a combination of community involvement and grassroots advertising as well as paid media on broadcast, social media, and digital platforms. Brain Balance’s target customer does a lot of research, so the brand tries to meet the consumers where they are.

Company History

17.  Brain Balance Achievement Centers was founded in 2007 by Dr. Robert Melillo and his business partner William Fowler. In the 1990s, Dr. Melillo, who worked as a chiropractor for several years, began noticing that there was a marked increase in children with learning and behavioral issues visiting his practice. Dr. Melillo wanted to find a way to help these children and their parents without using medication or more traditional coping mechanisms.

18.  After several years of research, Dr. Melillo developed the Brain Balance Program. The program features brain training, exercise, simple physical exercises, skills training, and dietary advice that Dr. Melillo says helps children with developmental and learning disabilities.

19.  Initially, Dr. Melillo used the Brain Balance Program to help patients at his own practice. After refining the program and noting its success, Dr. Melillo was ready to replicate the Brain Balance Program on a larger scale. He partnered with Fowler to franchise Brain Balance Achievement Centers.

20.  Over the next decade, Brain Balance grew around the United States, but several investigations were launched over Brain Balance’s claims about neuroplasticity and other aspects of brain development. In 2015, the Wisconsin Department of Health Services determined that there was insufficient evidence of effectiveness for the company’s claims. Following the investigations, Brain Balance stopped advertising certain aspects of its program.

21.  Today, Brain Balance says that its goal is to enrich the lives of children by helping them reach their full potential. There are still locations all around the U.S.

Entrepreneur’s Franchise 500

22.  Brain Balance Achievement Centers did not rank on Entrepreneur’s 2021 Franchise 500 list.

Section II – Estimated Costs

• Detailed estimates of Brain Balance franchise costs, based on Item 7 of the company’s 2021 FDD.

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

• 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 2021 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2018

• Outlets at the Start of the Year:  106
• Outlets at the End of the Year:  107
• Net Change:  +1

2019

• Outlets at the Start of the Year:  107
• Outlets at the End of the Year:  98
• Net Change:  -9

2020

• Outlets at the Start of the Year:  98
• Outlets at the End of the Year:  82
• Net Change:  -16

Company-Owned

2018

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  3
• Net Change:  0

2019

• Outlets at the Start of the Year:  3
• Outlets at the End of the Year:  1
• Net Change:  -2

2020

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2021 FDD) and Analysis

• Brain Balance is providing historical revenue information (without including expense items) for all franchisee-owned standard Centers that were open for the entire 2020 calendar year. Brain Balance has excluded standard Centers which opened or closed permanently in 2020.

• Brain Balance does not have any Satellite Centers established as of the date of the current Disclosure Document.

• 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 the year. The total number of Centers that were open for the entire year is shown as “Number of Centers.”

• The second chart shows the top and bottom 5 performing Centers by Gross Revenue for the year.

• The third chart shows each group for the 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, data Brain Balance pulled from its required Customer Relations Management System, 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.

• Some Centers have earned these amounts. Your individual results may differ. There is no assurance that you’ll earn as much.

• 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)

2020

• Maximum:  $847,316
• Minimum:  $72,908
• Average:  $321,817
• Median:  $301,750
• Number of Centers:  83
• Number That Met or Exceeded Average:  36

• 2020 was significantly impacted by the COVID-19 pandemic. Several areas across the country were required to shut down due to State and local mandates.

Part 2 – Top 5 and Bottom 5 Gross Sales

2020

Top 5 Gross Sales

• Rank 1:  $847,316
• Rank 2:  $665,325
• Rank 3:  $656,385
• Rank 4:  $595,322
• Rank 5:  $584,908

Bottom 5 Gross Sales

• Rank 1:  $72,907
• Rank 2:  $81,817
• Rank 3:  $86,116
• Rank 4:  $101,440
• Rank 5:  $116,256

Part 3 – Gross Sales (Top Third, Middle Third, Bottom Third)

2020

Top Third

• Total:  $12,365,909
• Maximum:  $847,316
• Minimum:  $360,882
• Average:  $441,639
• Median:  $455,930
• Number of Centers:  28
• Number That Met or Exceeded Average:  14

Middle Third

• Total:  $8,731,192
• Maximum:  $354,366
• Minimum:  $241,457
• Average:  $311,828
• Median:  $301,750
• Number of Centers:  28
• Number That Met or Exceeded Average:  11

Bottom Third

• Total:  $4,677,909
• Maximum:  $240,744
• Minimum:  $72,907
• Average:  $173,255
• Median:  $175,377
• Number of Centers:  28
• Number That Met or Exceeded Average:  14

Key Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️