What are the consequences if a Brain Balance franchisee breaches the Software 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; or
(l) FRANCHISEE abandons, fails to renew, or otherwise loses the right to operate or stops operating the Standard Brain Balance Center and fails to convert the Franchised Business into a standard Brain Balance Center within a period of 30 days from the date of non-operation of the Standard Brain Balance Center.
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 Brain Balance's 2025 Franchise Disclosure Document, a franchisee's breach of the Software Agreement can lead to significant consequences. Specifically, it is considered an Event of Default under the Franchise Agreement.
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 correct the breach, although the notice period may be longer if required by local laws. If the agreement is terminated, the franchisee must cease operating the Brain Balance center and discontinue using any of Brain Balance's trademarks, logos, and names.
Additionally, if the breach continues for 30 or more days after Brain Balance provides notice, Brain Balance has the right to suspend all services and benefits to the franchisee until the breach is resolved. However, this suspension does not relieve the franchisee of their ongoing obligations under the Franchise Agreement. Brain Balance also has the right to seek a court order to prevent any breach or threatened breach of the Franchise Agreement, acknowledging that failure to comply with the agreement's terms could cause irreparable damage to Brain Balance and its other franchisees.