Investment & Start Up Costs
Here’s how much it costs on average to start your own Brain Balance franchise. Item 7 from our FDD details your expenses.
Franchise costs for Brain Balance range from $339,486 to $583,431 on average according to our latest Franchise Disclosure Document (FDD).
Average Revenue Statistics
Using September 2021 to September 2022 data:
- The top 50% of Brain Balance Centers grossed an average of $447,812 in 2021 and $569,483 in 2022 (YOY 27% Increase)
- The top 25% of Brain Balance Centers grossed an average of $538,316 in 2021 and $668,002 in 2022 (YOY 24% increase)
- Our 2021 top performing center generated $865,662 in revenue.
- Our 2022 top performing center generated $1,164,994 in revenue.
YOUR ESTIMATED INITIAL INVESTMENT
Standard Brain Balance Center Estimate
|Type of Expenditure||Estimated Cost||Method of Payment||When Due||To Whom Payment Is to Be Made|
|Initial Franchise Fee (Note 1)||$45,000||Lump sum||Upon signing of Franchise Agreement||Franchisor|
|Computer Software program license fee||$15,000||Initial lump sum payment||Before Opening||Franchisor|
|In Center Program kits (Note 2)||$1750 (7 kits)||Initial lump sum payment||Before Opening||Third party vendor|
|Virtual Program Kits||$1275 each (3 kits)||Per virtual enrollment||As needed|
|Third-party Program Pass Through Fees (Note 3)||$3,250||Lump sum payment||Before Opening||Franchisor|
|Business license, if necessary, incorporation, etc. (Note 4)||$250 to $2,500||As incurred||Before Opening||Your attorney, accountant, and/or other third parties|
|Commercial space (2 months security) (Note 5)||$8,335 to $20,835||Lump Sum||Before Opening and ongoing||Landlord|
|Utility deposits and fees||$3,500 to $4,000||Monthly||Before Opening and ongoing||Utility companies|
|Insurance (Note 6)||$4,200 to $6,000 per calendar year, depending upon location||As arranged||Before Opening and ongoing||These monies are payable to insurance carriers with which a third-party vendor designated by the Franchisor has negotiated rates for all franchisees|
|Construction and remodeling, including architect design (Note 7)||$50,000 to $160,000||As incurred||Before Opening||Contractors, architect|
|Furniture, inventory, and equipment (lease deposit and installation) (Notes 8 and 9)||$50,000 to $65,000||As incurred||Before Opening||Your suppliers and telephone company|
|Technology Costs (Note 10)||$24,000 to $27,000||As incurred||Before Opening and ongoing||Suppliers|
|Start-up supplies (Note 11)||$4,500 to $5,000||As arranged||Before Opening||Suppliers|
|Signage||$9,000 to $13,000||As arranged||Before Opening||Suppliers|
|Call Center (Note 12)||$1,300 to $1,500||Lump sum||Before Opening||Designated vendor|
|Brain Balance Program® CRM System and annual maintenance (Note 13)||Each Center License will cost $1,596 per year||Debited via ACH||Annually||Franchisor|
|Credit Card System||$0 - $350 (Note 14)||Initial lump sum payment, monthly fees and annual PCI compliance fee||Before opening and the day of the month designated by the clearing house services company||System vendor or your vendor|
|Email and other collaboration tools||$0 (First 3 users are free of charge; additional users are $94/year.)||Debited via ACH||Payable annually, prorated by start date in the first year.||Franchisor (only if more than 3 are requested)|
|Workplace||$0 (First 3 users are free of charge; additional users are $94/year.)||$30 - $75 ($15/year per user)|
|Accounting Software & Bookkeeping (Note 15)||$1,500 - $1,800||One-time purchase and bookkeeping service for the 1st 6 months of operation.||You may elect to purchase additional software features||Third-party vendor designated by the Franchisor or an approved service company.|
|Additional Funds (Note 16)||$100,000 to $150,000||As incurred||As incurred||Vendors, suppliers, and employees|
|Pre-Opening travel and training costs (Note 17)||$5,000 to $7,000||As arranged||Before Opening||Suppliers of transportation, food, and lodging|
|Pre-Opening Advertising (Note 18)||$10,000 to $15,000||As arranged||Before Opening||Advertising media, grand opening activities|
|Total of all Initial Investment Costs||$339,486 to $583,431|
Brain Balance allows flexibility in selecting site locations, as well as building type requirements. Our Centers have seen success in retail space, medical office suites, and general office locations. The goal is to find the best location, and building type, available to maximize market penetration, while maintaining fiscal responsibility. We will work together to identify the best possible solution for your center.
Market Development Options
Brain Balance currently has major metropolitan areas, or territories, available for those looking to develop entire markets. The market development option allows a Franchisee to have exclusive territory rights, and the ability to open multiple locations, within that market. Major metropolitan areas with market develop options include:
- Chicago, IL
- Seattle, WA
- Boston, MA
- San Francisco, CA
- Philadelphia, PA
- Baltimore, MD / Washington DC
- Miami, FL
Satellite Center Options
Once a Center is established, and there is room for market expansion, Brain Balance has developed a satellite center concept. The intent of satellite centers is to allow Franchisees to efficiently expand within their market. Satellite centers are locations focused solely on delivery of the Brian Balance program. These are smaller footprint locations with minimal space allocated to administrative functions. The sales and client assessment process would occur at the main center location within the market. Approval of a satellite location is contingent on demand in the main center market. Satellite center locations require a Franchisee to have operated a main center in good standing for a minimum of one year.
Note 1: The initial non-refundable franchise fee is discussed in greater detail in Item 5.
Note 2: You are required to purchase a minimum supply of Program kits as initial inventory. We recommend that you purchase, example, three 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.
Note 3: You will pay us fees for third party software on an annual basis. Our estimate is the amount we will collect before you open.
Note 4: This estimate covers the cost of a business license, formation of an entity, and related professional fees if you hire someone to help you with these.
Note 5: At least 1,500 square feet of usable square footage will be needed to operate your Franchised Business (see Item 11). You do not need a space larger than 2,500 square feet, and our 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 us.
Note 6: The figures in the chart are based upon the estimated average premiums calculated by the insurance brokers designated by us who have negotiated rates with carriers nationally as first years' 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. (See Item 8.)
Note 7: Our estimate for construction costs is based on you following our recommended build-out guidelines for a leased space of the square footage we recommend (see Note 5, above). If you choose to upgrade to more luxurious building finishes than we recommend, or if you lease and build out a significantly larger space, your cost may exceed our estimate. These estimates are based on build out costs as reported to us 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 we have factored that into our costs. Franchisees reported TI ranging from zero to $165,000. Our estimates also removed abnormally low outliers caused by conditions such as a family member being a contractor, or build-outs completed at no cost by the landlord, as these are unusual circumstances we do not expect to be replicated in our estimates. 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.
Note 8: 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.
Note 9: Assumes all furniture and equipment is purchased.
Note 10: This estimate includes all your hardware costs, software license fees paid to third parties, and costs for assistance from an information technology (IT) service to help with initial set-up of your network, firewall, and internet access, and for an annual maintenance agreement with that IT service. The annual maintenance agreement is optional, but we recommend it. 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. We 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.
Note 11: We estimate that the range given will be sufficient to cover general office supplies, such as files, folders, paper, and writing utensils for the first three (3) months of the operation of the Franchised Business, including marketing and advertising materials that must be purchased from an approved vendor.
Note 12: 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 our prior written approval. Our estimate includes only the cost of monthly enrollment in a Call Center. Costs for leads and assessments are included in our estimate of Additional Funds.
Note 13: 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 helpdesk.
Note 14: 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. We expect 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. If you do not use our recommended supplier and you pay credit card servicing transaction fees that are higher than the set percentage, we will deduct only the set percentage for credit card transactions from your GR; conversely, if you are able to negotiate a lower credit card servicing transaction fee than what we have negotiated for all Brain Balance™ Centers, you will be permitted to retain the differential for the GR on which the Royalty is based.
Note 15: You are required to acquire and use an accounting software that meets our standards (currently QuickBooks), which you may either purchase or license on a monthly basis. In addition, we will require you to use the services of a professional bookkeeper for at least the first six months of operation that must be approved by the Franchisor. In our discretion, we can continue to require you to use a professional bookkeeping service.
Note 16: This is an estimate of the capital you will need to support additional expenses, such as payroll to cover required personnel including a Center Director (if you are not serving in this role) and a Program Director, cleaning service and supplies, repairs and maintenance, postage, credit card fees, supplies, and related expenses for the first three months, to the extent your collected revenue does not cover these costs. Amounts will vary depending on the salaries, provisions of various leases, and utilities' policies. New businesses often generate a negative cash flow. The is an estimate of your expenses during the first three (3) months of the operation of your Franchised Business. It is based on recent franchisee experiences in our system. The numbers provided are only estimates, and it is possible that additional working capital will be necessary during this time period.
Note 17: These costs will vary significantly depending on the distance traveled and the type of accommodations selected.
Note 18: 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.
Take the First Step
Brain Balance has helped more than 50,000 children reach their true potential.
Fill out the form or call us today to learn about the becoming a franchisee.