What must be assigned or transferred along with the Brain Balance franchise agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
3.05. In the event FRANCHISEE leases office space for the Franchised Business, such lease shall contain a conditional assignment clause, substantially similar to the template provided in Exhibit 5, that shall provide that upon the expiration or sooner termination of this Agreement, for any reason contained herein, the FRANCHISOR or its Affiliates shall have the option, exercisable within thirty (30) days after said expiration or termination, to assume the obligations of the lease, to replace FRANCHISEE and enter into possession under said lease or at any time prior thereto or thereafter to assign or reassign the lease to a third party. In connection therewith, FRANCHISEE shall execute a Conditional Assignment of Lease in the form attached hereto as Exhibit 5 (the "Assignment") pursuant to which Assignment FRANCHISEE has assigned to FRANCHISOR all its right, title, and interest in the lease for the Franchised Business. FRANCHISEE acknowledges that such Assignment is freely assignable by FRANCHISOR to any other person or entity, including any person or entity that may acquire the right to operate a Brain Balance® business in and from said office location or otherwise within the Territory.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, if a franchisee leases office space for their Brain Balance center, the lease must contain a conditional assignment clause. This clause allows Brain Balance to assume the lease obligations if the franchise agreement expires or terminates.
Specifically, Brain Balance has the option, within 30 days of the agreement's expiration or termination, to take over the lease, replace the franchisee, or assign the lease to a third party. The franchisee is required to execute a Conditional Assignment of Lease, assigning all rights and interests in the lease to Brain Balance.
This assignment is freely transferable by Brain Balance to any other entity, including someone who acquires the right to operate a Brain Balance business at that location or within the territory. This ensures that Brain Balance can maintain control over the location and continue operations even if the original franchisee exits the system.