How does a breach of another agreement with Brain Balance affect the franchise agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
(j) FRANCHISEE is in breach of any of the terms or conditions of the Software Agreement;
(k) FRANCHISEE is in breach of any of the agreements with supplier(s) designated by COMPANY for purchase of equipment, advertising materials, services or other supplies, products, and materials required for the operation of the Franchised Business;
17.03. (a) Upon the occurrence of an Event of Default, COMPANY, at its option, may terminate this Agreement on five (5) days' written notice (or a notice for a longer period of time as may be required by the law of the jurisdiction in which FRANCHISEE's Center is located) without a right to cure, and this Agreement, together with the Franchise granted hereunder, shall thereupon expire.
(b) Upon the occurrence of an Event of Default that continues for thirty (30) or more days of COMPANY giving FRANCHISE notice of such default, COMPANY shall have the absolute right without additional notice, to cease providing or making available any or all services and benefits provided for hereunder to FRANCHISEE until FRANCHISEE is current in the payment of fees and the filing of reports and has cured all other defaults.
COMPANY's exercise of such right shall not diminish FRANCHISEE's continuing obligations under this Agreement or constitute an actual or constructive termination of this Agreement.
- 17.04.
Upon the termination of this Agreement, whether as a result of an Event of Default or for any other reason, FRANCHISEE shall:
- (a) Cease to be a FRANCHISEE, cease to operate the Franchised Business, and refrain and desist from using the names and Marks and all other marks, trade names, trademarks, or logos of COMPANY, or such names or logos similar thereto, in any manner whatsoever, including, without limitation, together with other words such as "formerly known as."
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, a franchisee's breach of other agreements can significantly impact the franchise agreement. Specifically, if a Brain Balance franchisee breaches the terms of the Software Agreement or any agreements with designated suppliers for equipment, advertising materials, services, or other required supplies, it constitutes an event of default.
Upon such a breach, Brain Balance has the option to terminate the franchise agreement with only five days' written notice. This termination can occur without the franchisee having an opportunity to cure the breach, leading to the immediate expiration of the agreement and the franchise rights. Additionally, Brain Balance can cease providing services and benefits to the franchisee if the default continues for 30 or more days after notice, until the franchisee rectifies the payment of fees, filing of reports, and cures all other defaults.
Even if Brain Balance chooses not to terminate the agreement immediately, the franchisee remains obligated to fulfill all responsibilities outlined in the agreement. Upon termination, the franchisee must cease operating the Brain Balance center, discontinue using Brain Balance's names and marks, and change the center's name to exclude any Brain Balance branding. These measures protect Brain Balance's brand and network from potential damage caused by a non-compliant franchisee.