Is a Brain Balance franchisee entitled to claim money damages against the franchisor?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) In no event shall FRANCHISEE be entitled to make, nor shall FRANCHISEE make any claim, and FRANCHISEE hereby waives any claim, for money damages, nor shall FRANCHISEE claim any money damages by way of set-off, counterclaim, or defense, based upon any claim or assertion by FRANCHISEE that COMPANY has unreasonably withheld or unreasonably delayed any consent or approval to a proposed act by FRANCHISEE under any of the terms of this Franchise Agreement. FRANCHISEE's sole remedy for any such claim shall be an action or proceeding to enforce any such provisions, or for specific performance, or declaratory judgment.
- (c) FRANCHISEE agrees that it will not, on grounds of any alleged non-performance or breach by COMPANY of any of the provisions of this Agreement, withhold payment of any monies due to COMPANY. In any action or proceeding commenced by COMPANY for monies owed to it by FRANCHISEE, FRANCHISEE will not interpose and waives the right to interpose any counterclaim or to remove such action to any other court or to consolidate such action with any other action in that court, or in any other court whether brought prior or subsequent to COMPANY's action.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees are generally not entitled to claim money damages from the company under certain circumstances. Specifically, franchisees waive the right to claim money damages, including through set-off, counterclaim, or defense, if the claim is based on Brain Balance allegedly unreasonably withholding or delaying consent or approval for a proposed act by the franchisee under the Franchise Agreement. In such cases, the franchisee's sole recourse is to pursue an action to enforce the provisions, seek specific performance, or obtain a declaratory judgment.
Furthermore, the agreement stipulates that franchisees cannot withhold payments due to Brain Balance based on alleged non-performance or breach of the agreement by the company. If Brain Balance initiates legal action to recover monies owed, the franchisee waives the right to interpose any counterclaim, remove the action to another court, or consolidate it with any other action.
These provisions significantly limit a franchisee's ability to seek monetary compensation from Brain Balance in disputes related to the franchisor's actions or alleged breaches of contract. Instead, franchisees are primarily restricted to seeking equitable remedies such as specific performance or declaratory judgment, which compel Brain Balance to fulfill its obligations or clarify the parties' rights and responsibilities under the agreement. This arrangement favors Brain Balance by limiting their financial exposure in potential disputes with franchisees.