Does the Brain Balance agreement create a partnership or joint venture between the franchisor and franchisee?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, COMPANY has expended time, effort, and money to develop a uniform and standardized system (the "System") for the operation of Brain Balance® Centers (the "Center(s)"), which offer the Brain Balance Program®, a non-medical method of assessment and program development for individuals with developmental delays resulting from neurological and physiological imbalances using certain technology (the "Licensed Technology") (the "Business"), under the trade names and service marks "Brain Balance Program®", "Brain Balance®" with logo, and Brain Balance®" " ("Brain Balance Program®", "Brain Balance®" with logo, and Brain Balance®", and such other trade names, trademarks, service names, logos, copyrights, and other service marks now or hereafter used by COMPANY in connection with the System are hereinafter referred to as the "Marks"); and
WHEREAS, COMPANY's System includes a business strategy utilizing training methods, methodology, protocols, Licensed Technology, promotional programs, uniform standards, a confidential Operations Manual (as hereinafter defined), and other information, items, and experience that benefit the operation of the Business; and
WHEREAS, FRANCHISEE acknowledges that the Business, operated in accordance with the System and utilizing the Marks has acquired distinctive and valuable goodwill among the public; and
WHEREAS, FRANCHISEE desires to enter into the Business, to be operated in accordance with the System and utilizing the Marks, all subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises herein contained, it is agreed:
1. GRANT OF FRANCHISE
1.01. COMPANY hereby grants to FRANCHISEE and FRANCHISEE hereby accepts the right, license, privilege, and franchise of utilizing the Marks, the Licensed Technology, and System to establish a single Brain Balance® Center and to operate the Business therein, all, subject to the terms and conditions of this Agreement solely within the territory described in Schedule I attached hereto (the "Territory"), at a specific location to be approved in writing by
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
The 2025 Brain Balance Franchise Disclosure Document outlines a franchise agreement, not a partnership or joint venture. The agreement grants the franchisee the right to operate a Brain Balance Center using Brain Balance's system, marks, and licensed technology within a specific territory. This is evident in section 1.01, where Brain Balance grants the franchisee a "right, license, privilege, and franchise" to use its system.
The franchisee is responsible for the day-to-day operations and financial obligations of the business, as indicated in section 10.04, which states that the "FRANCHISEE shall pay on a timely basis all of its bills and obligations; federal, state, and local and other expenses; and all taxes of the Franchised Business." The franchisee must also abide by the terms of the agreement and devote full time and effort to the business's success, as stated in section 10.01. Brain Balance provides the franchisee with the methods, assessment tools, and procedures to implement the Brain Balance Program.
While Brain Balance offers support and training, particularly during the initial setup and ongoing operations, the franchisee operates as an independent entity. The franchisee must prominently display signage indicating that the center is independently owned and operated within the Brain Balance system, as noted in section 14.05. This reinforces the franchisor-franchisee relationship rather than a partnership, where both parties would share in the business's profits, losses, and control.