What must the Brain Balance franchisee do regarding assignment provisions in the lease?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
nduct businesses similar or identical to the Franchised Business under the Marks may market to clients located inside of the Territory or advertise inside of the Territory.
3.05. In the event FRANCHISEE leases office space for the Franchised Business, such lease shall contain a conditional assignment clause, substantially similar to the template provided in Exhibit 5, that shall provide that upon the expiration or sooner termination of this Agreement, for any reason contained herein, the FRANCHISOR or its Affiliates shall have the option, exercisable within thirty (30) days after said expiration or termination, to assume the obligations of the lease, to replace FRANCHISEE and enter into possession under said lease or at any time prior thereto or thereafter to assign or reassign the lease to a third party. In connection therewith, FRANCHISEE shall execute a Conditional Assignment of Lease in the form attached hereto as Exhibit 5 (the "Assignment") pursuant to which Assignment FRANCHISEE has assigned to FRANCHISOR all its right, title, and interest in the lease for the Franchised Business. FRANCHISEE acknowledges that such Assignment is freely assignable by FRANCHISOR to any other person or entity, including any person or entity that may acquire the right to operate a Brain Balance® business in and from said office location or otherwise within the Territory.
4. TERM
- 4.01. Unless otherwise terminated pursuant to the terms and conditions of this Agreement, the initial term of this Agreement shall be for a period of ten (10) years, commencing on the date hereof ("Initial Term").
- 4.02.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, if a franchisee leases office space for their Brain Balance center, the lease must include a conditional assignment clause. This clause should be similar to the template provided in Exhibit 5 of the FDD.
This clause gives Brain Balance or its affiliates the option to assume the lease if the franchise agreement expires or terminates for any reason. Brain Balance has 30 days after the expiration or termination to exercise this option. They can then replace the franchisee and take possession of the property, or assign the lease to a third party.
In connection with this clause, the franchisee must also execute a Conditional Assignment of Lease, using the form in Exhibit 5. This assignment transfers all of the franchisee's rights and interests in the lease to Brain Balance. Brain Balance can then freely assign this lease to another party, such as someone who acquires the right to operate a Brain Balance business at that location or within the territory. The franchisee must also obtain prior written approval from Brain Balance of the lease, sign the lease within 120 days of the execution of the Franchise Agreement, and provide a copy of the executed lease to Brain Balance within ten days of its execution. The lease shall contain provisions that permit assignment to Brain Balance and expressly provide that there are no obligations imposed on or granted against Brain Balance.