What is the consequence if a Brain Balance franchisee continues to use the Brain Balance marks after termination?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
20.02. FRANCHISEE acknowledges that its franchise is one of a number of Brain Balance® Centers using COMPANY's service marks and style of conduct and that the failure on the part of FRANCHISEE to comply with any of the terms of this Agreement could cause irreparable damage to some or all of the other offices franchised or operated by COMPANY and to COMPANY's business. Therefore, and notwithstanding the provisions contained in Paragraph 20.01 above, FRANCHISEE agrees that upon the happening of any Non-Curable Default or Event of Default set forth in Section 17.01 or 17.02, or in the event of a threatened breach by FRANCHISEE of any of the terms of this Agreement, COMPANY shall have the immediate right to secure a court order enjoining any such default or threatened breach. If this Agreement shall have been terminated, FRANCHISEE may be enjoined from any continued operation of any Center franchised under this Agreement and/or the Franchised Business. This covenant shall be independent and severable and shall be enforceable notwithstanding any other rights or remedies that either party may have.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, if a franchisee continues to operate a Brain Balance center or use the brand's names and marks after the franchise agreement terminates, Brain Balance has the right to seek a court order to stop the franchisee. This legal action can prevent the franchisee from continuing to operate the center and use Brain Balance's branding.
The FDD emphasizes that a Brain Balance franchise operates within a network where consistent adherence to the agreement's terms is crucial. If a franchisee fails to comply with the agreement, it could cause significant harm to other Brain Balance centers and the company itself.
To protect its brand and other franchisees, Brain Balance can pursue immediate legal remedies to prevent any potential breaches of the agreement. This includes seeking a court order to ensure the franchisee ceases operations and stops using Brain Balance's trademarks and trade names. This measure is independent of any other rights or remedies Brain Balance may have, highlighting the importance of protecting the brand's integrity and uniformity.
This clause underscores the importance of franchisees adhering to the terms of the franchise agreement and the potential legal ramifications of failing to do so, especially after termination. It is a fairly standard clause in franchise agreements to protect the brand's intellectual property and reputation.