What constitutes 'unfair competition' with Body Brain Center, as defined in the agreement?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
r than the operation of a Body & Brain Center pursuant to the terms of a Franchise Agreement; (ii) will maintain the confidentiality of the Know-how and not disclose any of the Know-how to any person at any time; (iii) will not make unauthorized copies of any portion of the Know-how disclosed in written or electronic form; and (iv) will adopt and implement all reasonable procedures that we require to prevent unauthorized use or disclosure of any of the Know-how.
- 5.2 Unfair Competition. For a period of two (2) years after you complete the training program, you agree that you will not compete with us or other Body & Brain franchisees, whether directly or indirectly. For purposes of the preceding sentence, you will be deemed to compete with us if you acquire, develop, own, operate, maintain or have any interest (including as an owner, partner, director, officer, employee, manager, consultant, shareholder, representative or agent) in any business that: (i) provides brain based education, Yoga, Taichi or Qi-Gong; and (ii) is located within a 15 mile radius from any Body & Brain Center or Dahn Yoga Center that is operating or under construction as of the date you sign this Agreement. This restrictive covenant does not preclude you from owning an interest of five percent (5%) or less in a competitive business that is a publicly traded company.
- 5.3 Nonsolicitation. For a period of two (2) years after you complete the training program, you may not, directly or indirectly, induce or attempt to induce: (i) any franchisee of ours to leave the Body & Brain system;
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, unfair competition is defined in several contexts, primarily focusing on activities that involve the use of proprietary knowledge and competition within specific geographic areas and timeframes. The agreement outlines restrictions both during the term of association with Body Brain Center and for a period after the training program is completed.
During the term of the franchise agreement, franchisees and their owners are prohibited from engaging in 'Prohibited Activities' that unfairly compete with Body Brain Center. After completing the training program, franchisees agree not to compete with Body Brain Center or its other franchisees for two years. This includes involvement in any business that provides brain-based education, Yoga, Taichi, or Qi-Gong within a 15-mile radius of any Body & Brain Center or Dahn Yoga Center that is operating or under construction. However, owning 5% or less of a publicly traded company is an exception to this restriction.
The agreement also addresses non-solicitation, preventing franchisees from inducing other franchisees to leave the Body Brain Center system or soliciting customers to transfer their business away from Body Brain Center or its franchisees for a period of two years after completing the training program. The definition of 'Competitive Business' includes any business that offers brain-based education, Yoga, Taichi, or Qi-Gong, indicating the breadth of activities considered competitive. These measures aim to protect Body Brain Center's market position and proprietary methods by limiting direct competition and the poaching of existing resources and clients.
These restrictions are designed to protect Body Brain Center's intellectual property, trade secrets, and established market presence. Franchisees should carefully consider these limitations, as they significantly impact their ability to engage in similar business ventures within a defined scope after their association with Body Brain Center ends. The agreement explicitly states that failure to comply with these terms will cause substantial and irreparable damage to Body Brain Center and its franchisees, highlighting the importance of adhering to these competitive restrictions.