Where in the Brain Balance franchise agreement can I find information about the covenant not to compete?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
20.02. FRANCHISEE acknowledges that its franchise is one of a number of Brain Balance® Centers using COMPANY's service marks and style of conduct and that the failure on the part of FRANCHISEE to comply with any of the terms of this Agreement could cause irreparable damage to some or all of the other offices franchised or operated by COMPANY and to COMPANY's business. Therefore, and notwithstanding the provisions contained in Paragraph 20.01 above, FRANCHISEE agrees that upon the happening of any Non-Curable Default or Event of Default set forth in Section 17.01 or 17.02, or in the event of a threatened breach by FRANCHISEE of any of the terms of this Agreement, COMPANY shall have the immediate right to secure a court order enjoining any such default or threatened breach. If this Agreement shall have been terminated, FRANCHISEE may be enjoined from any continued operation of any Center franchised under this Agreement and/or the Franchised Business. This covenant shall be independent and severable and shall be enforceable notwithstanding any other rights or remedies that either party may have.
(d) Neither FRANCHISEE nor any of its officers, directors, shareholders, members, or partners own, maintain, or have any interest in or otherwise participate or engage in, either directly or indirectly, by itself or in conjunction with any other person or entity, any supplemental education services business or other business that competes with the Franchised business, whether as partner, stockholder, member, officer, director, employee, representative, or in any other capacity.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, the covenant not to compete is addressed in multiple sections. Specifically, section 10.17(a) of Item 22 states that all permanent staff of the franchised business must execute Exhibit 3, which is the Confidentiality, Non-Solicitation, and Non-Compete Agreement, as provided in the Operations Manual. This agreement is designed to protect Brain Balance's trade secrets and confidential information both during and after the franchise agreement term.
Additionally, section 20.02 addresses the franchisee's acknowledgment that their franchise is part of a network of Brain Balance centers using the company's service marks and methods. It states that failure to comply with the terms of the agreement could cause irreparable damage to Brain Balance and its other franchisees. In the event of a breach or threatened breach of the agreement, Brain Balance has the right to seek a court order to prevent such actions, including enjoining the franchisee from continuing to operate the center after termination of the agreement. This clause reinforces the importance of adhering to the non-compete terms to protect the brand and the network.
Furthermore, section 8(d) outlines that neither the franchisee nor any of its officers, directors, shareholders, members, or partners can own, maintain, or participate in any business that competes with the franchised Brain Balance business, whether directly or indirectly. This includes involvement as a partner, stockholder, member, officer, director, employee, or representative. This provision ensures that those affiliated with the Brain Balance franchise are fully committed to the brand and do not engage in competing ventures, safeguarding Brain Balance's market position and proprietary information.