For Best Brains, what happens to the franchisee's obligations after the franchise agreement expires or terminates?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Agreement, we have the right to terminate this Agreement as if the default did in fact occur under this Agreement. For purposes of this Section, an agreement between the us or an affiliate of ours and you or your owners shall be deemed an agreement between us and you.
- D. Appointment of Manager. Notwithstanding the provisions of Sections 7.B. and 7.C. above, if you do not comply with any provision of this Agreement, we may assign a manager to the Franchised Business on a daily basis, whose function will be to ensure compliance with the provisions of this Agreement. You shall be responsible for paying us for the services of such manager at such reasonable
rate as we may establish. You agree to defend, indemnify and hold harmless the Company and its agents and employees who may act hereunder.
- 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:
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- 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;
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- 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;
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- Pay all amounts owing to us or our affiliates,
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- Cancel your assumed name registration, and not represent that you formerly did business under the Marks.
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- 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.
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- Deliver to us the names, addresses and telephone numbers of your customers during the preceding three years.
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Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to the 2025 Best Brains Franchise Disclosure Document, several obligations continue for the franchisee even after the franchise agreement expires or is terminated. Specifically, the franchisee must pay all outstanding amounts owed to Best Brains or its affiliates. The franchisee is also required to cancel their assumed name registration and must not represent themselves as a former Best Brains franchisee.
Additionally, Best Brains may direct the franchisee to transfer students to another Best Brains center, potentially refunding tuition for uncompleted subjects to ensure a smooth transition for the students. The franchisee must also provide Best Brains with customer names, addresses, and telephone numbers from the preceding three years. Furthermore, the franchisee is obligated to notify the telephone company and listing agencies about the termination of their right to use any phone numbers or listings associated with Best Brains, authorizing the transfer of these to Best Brains.
The franchisee must adhere to post-term covenants not to compete or solicit customers. They must also abide by any other covenant in the agreement that requires performance after they are no longer a franchisee. Within 30 days of termination or expiration, the franchisee must provide satisfactory evidence of compliance with these obligations to Best Brains. Best Brains also has the option to purchase the franchisee's assets within 90 days of termination or expiration.