What constitutes a 'Non-Curable Default' that allows Brain Balance to immediately terminate the agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
17. DEFAULT; TERMINATION
- 17.01. COMPANY shall have the absolute right, at its option, to terminate this Agreement and all rights granted hereunder, upon any of the following Non-Curable Defaults by FRANCHISEE, without giving an opportunity to cure the default and without prejudice to any other rights or remedies of COMPANY provided by law or this Agreement, effective immediately upon the provision of notice to FRANCHISEE or at such later time as indicated in such notice if:
- (a) FRANCHISEE fails to complete the initial Training Program prior to opening of the Center;
- (b) FRANCHISEE or any of its members, shareholders, officers, or FRANCHISEE's spouse use or disclose any of the Operations Manual, trade secrets, or confidential information in violation of this Agreement or any ancillary agreement signed in connection with this Agreement;
- (c) FRANCHISEE files a petition in bankruptcy or a petition in bankruptcy is filed against FRANCHISEE, which is not vacated after prompt and diligent effort to do so, or if FRANCHISEE files a petition for any relief under the United States Bankruptcy Act, or any state statute for protection against creditors, or FRANCHISEE becomes bankrupt or insolvent, or makes an assignment for the benefit of its creditors, or FRANCHISEE discontinues the Franchised Business, or a receiver is appointed over the operation of the Franchised Business and is not removed after prompt and diligent efforts to do so;
- (d) FRANCHISEE maintains false books, records, or financial or operating statements;
- (e) FRANCHISEE or any officer, director, partner, member, or principal shareholder of FRANCHISEE is convicted of a felony or the conversion or embezzlement of any property or funds, whether belonging to COMPANY or any other party, or a crime involving moral turpitude;
- (f) FRANCHISEE receives from COMPANY three (3) or more notices to cure defaults or violations of this Agreement within a twelve (12) month period;
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, there are several 'Non-Curable Defaults' that would allow Brain Balance to terminate the franchise agreement immediately without providing an opportunity for the franchisee to correct the issue. These defaults, outlined in Section 17.01, cover a range of serious violations and failures on the part of the franchisee.
These non-curable defaults include failing to complete the initial Training Program before opening the center, or if the franchisee, or any of its members, shareholders, officers, or the franchisee’s spouse, uses or discloses the Operations Manual, trade secrets, or confidential information. Further, if the franchisee files for bankruptcy or becomes insolvent, maintains false books or records, or is convicted of a felony, Brain Balance can immediately terminate the agreement. Finally, if the franchisee receives three or more notices to cure other defaults within a 12-month period, this also constitutes a non-curable default.
These stipulations are important for a prospective Brain Balance franchisee to consider, as they highlight the critical areas where failure to comply with the franchise agreement can lead to immediate termination. Unlike some defaults that allow a period for correction, these non-curable defaults represent serious breaches of the agreement that Brain Balance deems sufficient grounds for immediate termination, reflecting the importance of protecting the brand's standards, reputation, and confidential information.