What is the Brain Balance franchisee's obligation regarding notifying the company of any action, lawsuit, proceeding, claim, demand, inquiry, or investigation?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) FRANCHISEE agrees to give COMPANY notice of any such action, lawsuit, proceeding, claim, demand, inquiry, or investigation. At the expense and risk of FRANCHISEE, COMPANY may elect to assume (but under no circumstance is obligated to undertake) the defense and/or settlement of any such action, suit, proceeding, claim, demand, inquiry, or investigation, provided that COMPANY will seek the advice and counsel of FRANCHISEE and shall keep FRANCHISEE informed with regard to any such proposed or contemplated settlement(s). Such an undertaking by COMPANY shall in no manner or form diminish FRANCHISEE's obligation to indemnify COMPANY and to hold it harmless.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees are required to notify the company of any action, lawsuit, proceeding, claim, demand, inquiry, or investigation. This obligation ensures that Brain Balance is informed of any potential legal or financial issues that could affect the brand or the franchise system.
Brain Balance retains the option, but not the obligation, to assume the defense or settlement of any such action, suit, proceeding, claim, demand, inquiry, or investigation at the franchisee's expense and risk. If Brain Balance chooses to do so, they will seek the franchisee's advice and counsel and keep them informed about any proposed settlements.
This arrangement does not diminish the franchisee's responsibility to indemnify and hold Brain Balance harmless. This means the franchisee remains liable for any losses, damages, or costs incurred by Brain Balance as a result of these actions, even if Brain Balance takes over the defense or settlement. This clause highlights the importance of franchisees maintaining adequate insurance coverage and adhering to all legal and regulatory requirements in their business operations.