Is a Brain Balance franchisee required to grant an equity interest to any employee?

According to the 2025 Brain Balance Franchise Disclosure Document, franchisees are not explicitly required to grant equity interest to any employee. However, the FDD states that if the franchisee is a corporation, they cannot permit its officers, directors, shareholders, or members to assign or transfer shares of stock, except in strict accordance with the provisions of the Franchise Agreement. This implies that the franchisee's ability to transfer equity is restricted and governed by the agreement, but it does not mandate granting equity to employees.

This restriction on equity transfer is a protective measure for Brain Balance, ensuring that control and ownership of franchise locations remain stable and aligned with the brand's interests. It prevents franchisees from freely altering the ownership structure without the franchisor's consent, which could impact the consistency and quality of services provided across the Brain Balance system.

While the FDD does not require equity grants to employees, it is important for prospective franchisees to discuss employee incentive programs, including potential equity or profit-sharing arrangements, with Brain Balance during their due diligence. Understanding the franchisor's stance on such incentives can help franchisees attract and retain qualified staff, which is crucial for the success of their center. Franchisees should also seek legal counsel to ensure any employee incentive programs comply with applicable laws and the terms of the Franchise Agreement.