What constitutes a default under the Brain Balance Franchise Agreement related to other agreements?
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; or
(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.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, a franchisee can be in default of the Franchise Agreement if they breach certain other agreements. Specifically, a default occurs if the franchisee breaches the terms and conditions of the Software Agreement. Additionally, a franchisee defaults if they breach any agreements with suppliers designated by Brain Balance for the purchase of equipment, advertising materials, services, or other supplies, products, and materials required for operating the franchised Brain Balance business.
These stipulations are important for prospective Brain Balance franchisees to understand because they highlight the interconnectedness of the franchise agreement with other agreements necessary to operate the business. Failing to adhere to the terms of the Software Agreement or agreements with designated suppliers can trigger a default, leading to potential consequences such as termination of the franchise agreement.
Brain Balance can terminate the agreement with only five days' written notice without allowing an opportunity to cure the breach. Alternatively, if the default continues for 30 or more days after Brain Balance provides notice, Brain Balance has the right to cease providing services and benefits to the franchisee until the default is cured. It is important to note that Brain Balance's decision to withhold services does not relieve the franchisee of their ongoing obligations under the agreement.