Can Brain Balance establish or operate Brain Balance Centers outside of a franchisee's territory?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
Except for this Territory, the Franchise is non-exclusive, and we and our affiliates retain the right, among others:
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- To establish or operate, and grant franchises for others to establish or operate, Brain Balance® Centers or other businesses offering the Brain Balance Program® or other products or services under the Marks (as defined in Item 13) or any other marks, at any location outside the Territory, regardless of proximity to your Center.
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- Within and outside the Territory, to market, sell, or distribute, or to contract with others to market, sell, or distribute, any services of any kind (including books, audio tapes, video tapes, computer software, and computerized instruction), to any person, organization, or public or private entity, using the Marks or other marks, through any channel of distribution, including through any computer service, email, the Internet, or any computer, television or other electronic device, bookstores or any other retail Centers, mail order, or counseling center.
Source: Item 12 — TERRITORY (FDD pages 47–49)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, Brain Balance retains the right to establish or operate Brain Balance Centers or other businesses offering the Brain Balance Program outside a franchisee's territory. This means that while a franchisee is granted an exclusive area, Brain Balance can still operate or franchise others to operate competing centers outside of that territory, regardless of their proximity to the franchisee's center.
The FDD specifies that Brain Balance's rights extend to marketing, selling, or distributing services of any kind, including books, audio tapes, video tapes, computer software, and computerized instruction, through various channels of distribution, both within and outside the franchisee's territory. This includes using the Brain Balance marks or other marks through computer services, email, the Internet, bookstores, mail order, or counseling centers. This broad reservation of rights allows Brain Balance to pursue various business opportunities without compensating the franchisee, even if those opportunities draw customers from within the franchisee's territory.
This aspect of the franchise agreement highlights a potential risk for franchisees. While they are granted an exclusive territory, Brain Balance's ability to operate or franchise competing businesses outside that territory could impact the franchisee's market share and revenue. Additionally, other Brain Balance franchises are allowed to solicit and accept customers from within a franchisee's territory without any obligation to provide compensation.
Prospective franchisees should carefully consider these territorial limitations and the potential for competition from Brain Balance or other franchisees when evaluating the franchise opportunity. It is important to understand the specific boundaries of the territory being granted and to assess the potential impact of Brain Balance's reserved rights on the franchisee's business.