What is the scope of activities that the entity can engage in after a Best Brains franchise is transferred to it?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Assignment to Entity. If you are in full compliance with this Agreement, we shall not unreasonably withhold our consent to a transfer of this Agreement and the assets of the Franchised Business to an entity, provided:
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- the entity name does not include the word "BEST" or "BRAIN" or "BRAINS" and its activities are confined exclusively to operating your Franchised Business;
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- Franchisee owns and controls all of the ownership interest and the entity assumes all of Franchisee's obligations hereunder and the owners agree to be personally bound jointly and severally by all the provisions of this Agreement and assume and guarantee all of Franchisee's obligations hereunder and all other agreements;
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- any subsequent transfer of ownership interest in the entity shall be subject to our consent;
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- the ownership shares indicate that any transfer of interests is restricted and may be transferred subject to our consent only in accordance with the terms of this Agreement; and
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- You shall pay to us all legal expenses and other charges we incur in connection with such transfer.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, if a franchisee transfers their Best Brains franchise to an entity, that entity's activities must be confined exclusively to operating the franchised Best Brains business. The entity's name also cannot include the words "BEST," "BRAIN," or "BRAINS."
This restriction ensures that the entity focuses solely on running the Best Brains center and doesn't engage in other business ventures that could distract from or compete with the franchise. It also protects Best Brains' brand identity by preventing the entity from using similar names that could cause confusion.
Furthermore, any subsequent transfer of ownership interest in the entity is subject to Best Brains' consent, and the ownership shares must indicate that transfers are restricted and can only occur with Best Brains' approval, in accordance with the terms of the franchise agreement. This allows Best Brains to maintain control over who operates its franchises, even after an initial transfer to an entity.