Does the Brain Balance franchise agreement specify who bears the costs associated with sending notices?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
20.04. (a) If a claim for amounts owed by FRANCHISEE to COMPANY is asserted in any legal proceeding before a court of competent jurisdiction, then FRANCHISEE shall
not interpose any counterclaim in any such proceeding, and then both parties waive their right, if any, to a trial by jury. If COMPANY employs the services of an attorney for the collection of any unpaid amount due hereunder, FRANCHISEE shall reimburse COMPANY for all costs and expenses, including reasonable attorney's fees, incurred in such collection.
20. ARBITRATION; REMEDIES
20.01. Except as provided in Section 20.02 below, COMPANY and FRANCHISEE agree that any and all disputes between them, and any claim by either party that cannot be amicably settled (including tort as well as contract claims, claims based upon any federal, state, or local statute, law, order, ordinance, or regulations, and claims arising from any relationship prior to, at the time of entering, during the term of, or upon or after expiration or termination of this Agreement) except for claims relating to the Marks or other service marks or commercial symbols of COMPANY, shall be determined solely and exclusively by arbitration under the Federal Arbitration Act, as amended, and in accordance with the rules then obtaining of the American Arbitration Association or any successor at its office located in San Francisco, ou, unless the parties otherwise agree in writing. COMPANY and FRANCHISEE consent to personal jurisdiction and hereby waive all objections to personal jurisdiction or venue for the purpose of carrying out the purposes of this Paragraph 20.01. The arbitrator(s) may not under any circumstance: (i) stay the effectiveness of any pending termination; (ii) assess punitive, speculative, or exemplary damages; or (iii) make any award that extends, modifies, or suspends any lawful term of this Agreement or any reasonable standard of business performance set by COMPANY in good faith. The arbitrator(s) shall be limited to the issues in dispute between COMPANY and FRANCHISEE and a dispute between any other franchisee and COMPANY shall not be considered in the same arbitration proceeding or by the same arbitrator(s). The parties shall each bear their own expense, including but not limited to all fees and expenses of the arbitrator(s), the American Arbitration Association, attorneys, and accountants. Judgment upon any award of the arbitrator(s) shall be conclusive and binding and shall be entered in a court of competent jurisdiction.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
Based on the 2025 Brain Balance Franchise Disclosure Document, the franchise agreement addresses cost allocation in the context of legal proceedings. Specifically, if Brain Balance has to initiate a legal claim against a franchisee for unpaid amounts, the franchisee is responsible for reimbursing Brain Balance for all associated costs and expenses, including reasonable attorney's fees. This clause ensures that Brain Balance can recover expenses incurred while pursuing legitimate claims against franchisees who default on their financial obligations.
Additionally, in the event of disputes leading to arbitration, the franchise agreement stipulates that each party, Brain Balance and the franchisee, will bear their own expenses. These expenses include, but are not limited to, all fees and expenses of the arbitrator(s), the American Arbitration Association, attorneys, and accountants. This arrangement is typical in franchise agreements, as it ensures that neither party is financially burdened by the other's legal costs during the arbitration process.
However, the franchise agreement does not explicitly detail who bears the costs associated with sending routine notices or other general communications. Therefore, it is important for a prospective franchisee to clarify with Brain Balance the specific cost responsibilities related to sending notices, as this could encompass various forms of communication throughout the franchise term.