Following termination, can a Brain Balance franchisee act as a consultant to other franchisees using confidential information?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.16.
FRANCHISEE shall not utilize the name "Brain Balance®," or "Brain Balance Program®," or any of the Marks in connection with any purpose or service other than the operation of a Brain Balance® Center to the extent specifically permitted hereunder.
- 10.17. (a) All permanent staff of the Franchised Business shall execute Exhibit 3, the Confidentiality, Non-Solicitation, and Non-Compete Agreement as provided in the Operations Manual.
FRANCHISEE will take such action in connection therewith as may be required by COMPANY both during and upon termination of this Agreement in order to protect any trade secrets that are proprietary to COMPANY or any information, knowledge, or know-how deemed confidential under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, a franchisee's ability to act as a consultant to other franchisees using confidential information after termination is restricted. Section 10.17(a) states that all permanent staff must sign a Confidentiality, Non-Solicitation, and Non-Compete Agreement, as detailed in the Operations Manual. Furthermore, the franchisee is obligated to protect Brain Balance's trade secrets and confidential information both during and after the termination of the Franchise Agreement. This suggests that using confidential information to consult with other franchisees post-termination would likely be a breach of these agreements.
Paragraph 10.16 emphasizes that a franchisee cannot use the Brain Balance name or marks for any purpose other than operating a Brain Balance Center as specifically permitted by the agreement. This restriction would likely prevent a former franchisee from leveraging their knowledge and experience gained from the franchise to offer consulting services under a different brand, especially if it involves the use of Brain Balance's confidential information or trade secrets.
In practical terms, a franchisee considering offering consulting services post-termination needs to carefully review the Confidentiality, Non-Solicitation, and Non-Compete Agreement, as well as the Operations Manual, to fully understand the scope of the restrictions. It is advisable to seek legal counsel to determine what activities would be permissible and to avoid potential legal action from Brain Balance for violating the terms of the agreements. The restrictions aim to protect Brain Balance's proprietary information and maintain the integrity of its brand and system.