Is a Brain Balance franchisee entitled to compensation if the company discontinues or modifies the Marks?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
of services throughout the franchise network. Therefore, to enhance the reputation and good will of COMPANY, FRANCHISEE agrees to:
- (a) operate, advertise, and promote the Franchised Business under the Marks exactly as set forth in the Operations Manual;
- (b) adopt and use the Marks in accordance with rules now or hereafter prescribed in writing by COMPANY; and
- (c) conduct its Franchised Business under the Marks in accordance with the operational standards established from time to time by COMPANY, as described in COMPANY's confidential Operations Manual and/or other documents now or hereafter loaned or provided by COMPANY to FRANCHISEE.
- 12.09. FRANCHISEE expressly covenants that, during the term of this Agreement and thereafter, FRANCHISEE shall not, directly or indirectly, commit any act of infringement or take any other action in derogation of COMPANY's rights in or to use the Marks.
- 12.10. COMPANY reserves the right in its sole discretion at
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
The 2025 Brain Balance Franchise Disclosure Document does not explicitly state whether a franchisee is entitled to compensation if the company discontinues or modifies its trademarks or service marks (the "Marks"). However, the document does address the franchisee's obligations regarding the use of Brain Balance's Marks.
Specifically, the franchisee must use the Marks exactly as outlined in the Operations Manual and in accordance with the rules prescribed in writing by Brain Balance. The franchisee also agrees to conduct its franchised business under the Marks according to the operational standards set by Brain Balance. The franchisee is prohibited from infringing upon or taking any action against Brain Balance's rights to use the Marks. Brain Balance retains the right to change the Marks at its sole discretion.
While the FDD outlines the franchisee's responsibilities in using and protecting the Brain Balance Marks, it remains silent on the matter of compensation should Brain Balance decide to discontinue or modify them. A prospective franchisee should seek clarification from the franchisor regarding this potential scenario and its implications.