Does Best Brains have to provide a cure period if a franchisee becomes insolvent?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Section 7.B. is deleted and in its place is substituted the following:
- 7.B.1 Termination by Us Without Right to Cure. We may terminate this Agreement without notice and the opportunity to cure for any of the following reasons:
- (a) The franchisee or the business to which the franchise relates has been judicially determined to be insolvent, all or a substantial part of the assets thereof are assigned to or for the benefit of any creditor, or the franchisee admits his or her inability to pay his or her debts as they come due;
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to the 2025 Best Brains Franchise Disclosure Document, the standard agreement allows Best Brains to terminate the agreement without an opportunity to cure if the franchisee has been judicially determined to be insolvent. However, this is superseded by the California addendum.
The California addendum states that Best Brains may terminate the agreement without notice and opportunity to cure if the franchisee or the business to which the franchise relates has been judicially determined to be insolvent, all or a substantial part of the assets thereof are assigned to or for the benefit of any creditor, or the franchisee admits his or her inability to pay his or her debts as they come due.
This means that if a Best Brains franchisee in California becomes insolvent, Best Brains does not have to provide a cure period before terminating the agreement. This is a significant risk for franchisees in California, as they could lose their franchise without any opportunity to fix the financial issues. Franchisees should carefully consider this risk before investing in a Best Brains franchise, especially in California.