Which covenants in the Best Brains franchise agreement survive termination or expiration?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
- **E.
Post Termination Obligations.** If this agreement expires, is not renewed, or is terminated for any reason by any party, including a sale or transfer of the Franchised Business, you must immediately:
Stop identifying yourself as a franchise of ours and discontinue use of the Marks, the System, trade names, trademarks, and any other marks which are likely to be confused with our Marks;
Deliver to us any paper and electronic copies of the Operations Manual and the Software Program to the Company and any signs utilizing the Marks;
Pay all amounts owing to us or our affiliates,
Cancel your assumed name registration, and not represent that you formerly did business under the Marks.
Transfer some, or all, of the students to another BEST BRAINS learning center, refund some or all of the tuition paid by the students for subjects which have not yet been completed, and take such other actions as we may direct to ensure the orderly transition of such students.
Deliver to us the names, addresses and telephone numbers of your customers during the preceding three years.
Promptly notify the telephone company and all listing agencies of the termination or expiration of your right to use any telephone number and any regular, classified or other listings associated with the Marks and to authorize transfer of same to or at the direction of the Company.
You agree that we have the sole rights to and interest in all e-mail and internet addresses, websites, domain names, social media sites and search engine identifiers, and all telephone and facsimile numbers and directory listings associated with the Marks, and you authorize us, and appoint us as your attorney-in-fact, to direct such telephone companies, internet service providers, domain name registrars, social media hosts and all listing agencies to transfer same to us or our designee.
If we so request, assign to us or our designee your interest in any lease then in effect for the Franchised Business premises.
We have 30 days after termination or expiration of this Agreement to exercise this option.
Adhere to the provisions of the post-term covenants not to compete and not to solicit;
Abide by any other covenant in this Agreement that requires performance by you after you are no longer a franchisee; and
Within 30 days of termination or expiration, furnish to us satisfactory evidence of your compliance with the foregoing obligations.
- **F.
Option to Purchase Assets.** Upon the termination or expiration of this Agreement, we have a 90 day option to purchase from you some or all of the equipment, supplies, inventory, advertising materials and any items with our Marks for cash at fair market value.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, several obligations continue even after the franchise agreement ends. Upon termination or expiration, a franchisee must cease representing themselves as a Best Brains franchisee and discontinue using any related trademarks, systems, or trade names. They are also required to return all copies of the Operations Manual and Software Program, both physical and electronic, along with any signs displaying Best Brains' marks.
Financially, the franchisee remains responsible for paying all outstanding amounts owed to Best Brains or its affiliates. They must also cancel their assumed name registration and refrain from implying any former association with the Best Brains brand. Additionally, Best Brains retains the right to have the franchisee transfer students to another Best Brains center, potentially refunding tuition for incomplete subjects to ensure a smooth transition. The franchisee must also provide customer contact information from the previous three years.
Furthermore, the franchisee must adhere to post-term covenants, including non-compete and non-solicitation agreements, and fulfill any other obligations specified in the agreement that extend beyond the franchise term. The franchisee is obligated to provide evidence of compliance with these requirements within 30 days of termination or expiration. Best Brains also has the option to purchase the franchisee's assets, such as equipment and inventory, at fair market value within 90 days of the agreement's end.
These post-termination obligations are typical in franchising to protect the brand and goodwill of Best Brains. Prospective franchisees should carefully review these sections of the franchise agreement to understand their responsibilities after the agreement concludes, whether by choice or termination. Understanding these obligations is crucial for planning an exit strategy or transitioning to other business ventures.