What rights does Body Brain Center, LLC reserve in the Franchise Agreement?
Body_Brain_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
capitalized terms that are defined in the body of this Agreement, Attachment "A" lists the Sections of this Agreement in which such terms are defined.
- 2. GRANT OF FRANCHISE. We hereby grant you a license to own and operate a Body & Brain Center (your "Business" or your "Center") using our Intellectual Property from a single location that we approve in writing. We reserve all rights not expressly granted to you under this Agreement.
- 3. TERRITORIAL RIGHTS AND LIMITATIONS. Once we have approved the site for your Center, we will grant you a protected territory that will be identified on Part C of Attachment "B" (your "Territory"). Your Territory will include a minimum population of 70,000. We will not operate, or grant a franchise to a third party to operate, a Body & Brain Center or a Dahn Yoga Center that is physically located within your Territory during the Term, except as otherwise provided in this Section with respect to Captive Venues and Alternative Channels of Distribution. We reserve the right to: (i) operate Body & Brain Centers, or grant franchises or licenses to third parties to operate Body & Brain Centers, in Captive Venues that are located in your Territory;
Source: Item 23 — RECEIPT (FDD pages 43–178)
What This Means (2025 FDD)
According to Body Brain Center's 2025 Franchise Disclosure Document, Body Brain Center, LLC retains all rights not explicitly granted to the franchisee in the Franchise Agreement. Specifically, while franchisees are granted a protected territory, Body Brain Center reserves the right to operate Body & Brain Centers, or grant franchises or licenses to others, within the franchisee's territory in Captive Venues. They also reserve the right to sell competitive or identical goods or services through Alternative Channels of Distribution, regardless of whether these sales occur within the franchisee's territory. Alternative Channels of Distribution include Body & Brain home-based franchises.
This reservation of rights has significant implications for prospective franchisees. Even with a protected territory, Body Brain Center retains considerable freedom to operate or license other businesses that may compete with the franchisee's center. The franchisee's exclusive territory is subject to exceptions for Captive Venues and Alternative Channels of Distribution, which could limit the franchisee's market share and revenue potential.
For example, Body Brain Center could establish a Body & Brain Center in a local corporate office, which would be considered a Captive Venue, even if it is within the franchisee's territory. Similarly, Body Brain Center could offer home-based franchises that operate within the franchisee's territory, providing similar services and potentially drawing customers away from the physical center.
Prospective franchisees should carefully consider these reserved rights and their potential impact on their business. It is important to understand the scope of "Captive Venues" and "Alternative Channels of Distribution" and to assess the potential for competition from these sources within their territory. Franchisees may want to discuss these issues with Body Brain Center to gain a clearer understanding of how these reserved rights may be exercised and what protections, if any, are available to mitigate potential competition.