Does the Brain Balance agreement define what constitutes a 'supplemental education services business' for the purposes of the non-compete clause?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of one (1) year after the termination of this Agreement, regardless of the cause of termination, expiration, or non-renewal, neither FRANCHISEE nor any of its officers, directors, shareholders, members, or partners shall enter into the supplemental educational services business, or engage in other related activities, whether as a partner, stockholder, officer, director, employee, representative, or in any other capacity within a fifty (50) mile radius of the Center.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the franchise agreement does not specifically define what constitutes a 'supplemental education services business' for the purposes of the non-compete clause. However, the document does state that for a period of one year after termination of the agreement, the franchisee cannot enter into the supplemental educational services business or engage in other related activities within a 50-mile radius of the Brain Balance center. This restriction applies regardless of the reason for termination, expiration, or non-renewal of the agreement.
Without a clear definition in the FDD, there is ambiguity regarding what activities would be considered competitive and thus prohibited. This could lead to disputes between Brain Balance and former franchisees if the franchisee engages in any educational services after leaving the franchise. The lack of clarity places the franchisee at risk of unintentionally violating the non-compete agreement.
Prospective franchisees should seek clarification from Brain Balance regarding the scope and definition of 'supplemental educational services business' to fully understand the limitations imposed by the non-compete clause. Understanding what specific activities are included or excluded is crucial for making an informed decision about investing in a Brain Balance franchise and planning for future career options after the franchise term.