What is the 'Assignment Notice' as it relates to the Brain Balance franchise?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of (i) a default under the Lease by Assignor, (ii) a default under the Agreement by Assignor, or (iii) the expiration and termination of the Agreement for any reason whatsoever, Assignee shall have the option to accept this Assignment and replace Assignor as tenant under the Lease pursuant to the terms set forth herein by providing an Assignment Notice (as defined in Section 6) to Landlord.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, an 'Assignment Notice' is a mechanism related to the Conditional Assignment of Lease. This assignment is enacted according to the franchise agreement among the franchisor (referred to as "Assignee"), the franchisee (referred to as "Assignor"), and the Landlord, concerning the lease for the premises where the Brain Balance franchise operates. The agreement specifies that the landlord is not a direct party to the overarching franchise agreement.
Under this conditional assignment, the franchisee conditionally transfers their rights, title, and interest in the lease and any associated security deposit to Brain Balance. However, the franchisee retains all rights and obligations as the tenant as long as certain conditions are unmet. The landlord is obligated to provide Brain Balance with a 15-day written notice before any lease modifications or cancellations and must also furnish copies of any default notices issued to the franchisee within three days of their original issuance. Brain Balance, at its discretion, has the right, but not the obligation, to rectify any lease default if the franchisee fails to do so within the allotted timeframe; however, any action taken by Brain Balance to cure a default does not absolve the franchisee of their default status under the lease for the purposes of the assignment.
Brain Balance has the option to accept the assignment and replace the franchisee as the tenant under the lease by providing an Assignment Notice to the landlord. This option becomes available if the franchisee defaults on the lease or the franchise agreement, or if the franchise agreement expires or terminates for any reason.