For Brain Balance, what is conditionally assigned to the Assignee?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
This Conditional Assignment of Lease (this "Assignment") is made pursuant to the terms of that certain Franchise Agreement of even date herewith (hereinafter called the "Agreement") by and among FRANCHISOR (hereinafter "Assignee"), FRANCHISEE (hereinafter "Assignor") and Landlord, with respect to the Lease for the Premises used by FRANCHISEE in the operation of the Franchise in the Franchised Territory covered by the Agreement.
Nothing in this Assignment shall be deemed to make Landlord a party to the Agreement.
Assignor conditionally assigns to the Assignee all the Assignor's right, title, and interest in (a) the Lease and (b) the security deposit, if any, stated in the Lease, all subject to the terms hereof.
As long as the conditions set forth in Section 5 are not met, Assignor shall have all rights, privileges and obligations as the tenant under the Lease.
Landlord shall provide Assignee with (i) fifteen (15) days' written notice prior to any modification, amendment or cancellation of the Lease, and (ii) copies of any written notices of default given to Assignor under the Lease within three (3) days of Landlord's giving such notice to Assignor.
Landlord grants to Assignee, at Assignee's option, the right (but not the obligation) to cure any default under the Lease within fifteen (15) days after the expiration of the period in which Assignor may cure the default, if Assignor fails to do so.
Notwithstanding any action by Assignee to cure Assignor's default under the Lease, Assignor shall be deemed to be in default under the Lease for purposes of this Assignment.
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, the franchisee (Assignor) conditionally assigns to the franchisor (Assignee) all of the Assignor's right, title, and interest in (a) the Lease and (b) the security deposit, if any, stated in the Lease. This assignment is subject to the terms outlined in the document.
This conditional assignment means that while the franchisee initially retains all rights, privileges, and obligations as the tenant under the lease, Brain Balance has the option to take over the lease under certain conditions. These conditions include a default under the lease by the franchisee, a default under the Franchise Agreement by the franchisee, or the expiration and termination of the Franchise Agreement for any reason.
If any of these conditions occur, Brain Balance can choose to accept the assignment and replace the franchisee as the tenant by providing an Assignment Notice to the landlord. This protects Brain Balance's interest in maintaining a location for a Brain Balance center, even if the franchisee is no longer operating the business.
Furthermore, the landlord is required to provide Brain Balance with fifteen days' written notice before any modification, amendment, or cancellation of the lease. The landlord must also provide copies of any written notices of default given to the franchisee within three days of giving such notice to the franchisee. This ensures Brain Balance is informed of any potential issues with the lease and has the option to cure any default if the franchisee fails to do so, although any action by Brain Balance to cure a default does not remove the franchisee's default status for the purposes of the assignment.