Is the Conditional Assignment of Lease for a Brain Balance franchise freely assignable by the franchisor?
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 Brain Balance's 2025 Franchise Disclosure Document, the Conditional Assignment of Lease is indeed freely assignable by Brain Balance. Specifically, if a franchisee leases office space, the lease must include a clause that allows Brain Balance or its affiliates to assume the lease obligations if the Franchise Agreement expires or terminates. This option is exercisable within 30 days of such expiration or termination.
As part of this arrangement, the franchisee must execute a Conditional Assignment of Lease, giving Brain Balance all rights to the lease. The FDD explicitly states that this assignment is freely assignable by Brain Balance to any other person or entity. This includes someone who may acquire the right to operate a Brain Balance business at that location or within the territory.
This clause ensures that Brain Balance has the flexibility to maintain control over the location of its franchises, even if a franchisee leaves the system. It allows Brain Balance to seamlessly transition the location to a new franchisee or operate it themselves, minimizing disruption to the business and preserving the brand's presence in the market. For a prospective franchisee, this means understanding that upon termination of their agreement, Brain Balance has the right to take over their lease and potentially transfer it to another operator.