Does the Brain Balance agreement state that the non-compete covenants are considered fair and reasonable?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.17. (a) All permanent staff of the Franchised Business shall execute Exhibit 3, the Confidentiality, Non-Solicitation, and Non-Compete Agreement as provided in the Operations Manual.
FRANCHISEE will take such action in connection therewith as may be required by COMPANY both during and upon termination of this Agreement in order to protect any trade secrets that are proprietary to COMPANY or any information, knowledge, or know-how deemed confidential under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Brain Balance franchise agreement does not explicitly state that the non-compete covenants are considered fair and reasonable. However, the document does state that all permanent staff of the Franchised Business must execute a Confidentiality, Non-Solicitation, and Non-Compete Agreement as provided in the Operations Manual.
This agreement is designed to protect Brain Balance's trade secrets, proprietary information, knowledge, and know-how, which are deemed confidential. The franchisee is obligated to take necessary actions to ensure compliance with this agreement, both during the term of the franchise agreement and after its termination. This suggests that Brain Balance places significant importance on protecting its business interests and confidential information through these covenants.
While the FDD doesn't include an explicit statement affirming the fairness and reasonableness of the non-compete agreement, the inclusion of such a clause and the franchisee's obligation to enforce it indicate that Brain Balance views these covenants as necessary for protecting its business. A prospective franchisee should carefully review Exhibit 3, the Confidentiality, Non-Solicitation, and Non-Compete Agreement, and seek legal counsel to fully understand the scope and implications of these restrictions.
It would be prudent for a potential Brain Balance franchisee to discuss the specifics of the non-compete agreement with the franchisor and legal counsel to determine its enforceability and impact on their future business activities. Understanding the terms and conditions of the non-compete agreement is crucial before entering into a franchise agreement.