Does a Brain Balance franchisee have a right to cure an Event of Default before termination?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
17.03. (a) Upon the occurrence of an Event of Default, COMPANY, at its option, may terminate this Agreement on five (5) days' written notice (or a notice for a longer period of time as may be required by the law of the jurisdiction in which FRANCHISEE's Center is located) without a right to cure, and this Agreement, together with the Franchise granted hereunder, shall thereupon expire.
(b) Upon the occurrence of an Event of Default that continues for thirty (30) or more days of COMPANY giving FRANCHISE notice of such default, COMPANY shall have the absolute right without additional notice, to cease providing or making available any or all services and benefits provided for hereunder to FRANCHISEE until FRANCHISEE is current in the payment of fees and the filing of reports and has cured all other defaults.
COMPANY's exercise of such right shall not diminish FRANCHISEE's continuing obligations under this Agreement or constitute an actual or constructive termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, Brain Balance may terminate the franchise agreement for an Event of Default with only five days written notice, without providing an opportunity to cure the default. However, if an Event of Default continues for 30 or more days after Brain Balance provides notice, Brain Balance has the right to cease providing services and benefits until the franchisee becomes current on payments and cures all other defaults.
This means that Brain Balance franchisees may face immediate termination without a chance to correct the issue for certain defaults. For other defaults, while not facing immediate termination, franchisees may have services and benefits suspended if the default is not cured after 30 days notice.
It is important to note that Brain Balance's decision to cease providing services does not waive the franchisee's obligations under the agreement or constitute a termination of the agreement. The franchisee is still responsible for fulfilling their obligations even if Brain Balance has suspended services. Franchisees should carefully review the franchise agreement to understand what constitutes an Event of Default and the potential consequences.