What are the Brain Balance franchisee's obligations upon termination of the Franchise Agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
d 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.
- 17.04. Upon the termination of this Agreement, whether as a result of an Event of Default or for any other reason, FRANCHISEE shall:
- (a) Cease to be a FRANCHISEE, cease to operate the Franchised Business, and refrain and desist from using the names and Marks and all other marks, trade names, trademarks, or logos of COMPANY, or such names or logos similar thereto, in any manner whatsoever, including, without limitation, together with other words such as "formerly known as."
- (b) Promptly change FRANCHISEE's name to a name that does not include the words "Brain Balance®" or "BBF" or any of the Marks or any words similar thereto.
- (c) Promptly pay to COMPANY all debts, including any outstanding Royalty and Advertising Fund contribution, arising from FRANCHISEE's obligations under this
Agreement, which shall upon termination for any default by FRANCHISEE include all damages, costs, and expenses, including reasonable attorney's fees, incurred by COMPANY in obtaining injunctive relief for the enforcement of any provision of this Agreement as a result of the default and all Royalty and Advertising Fund contributions for the entire unperformed term of this Agreement.
- (d) Promptly endeavor to collect all accounts receivable and file reports with respect thereto that derive from services provided by FRANCHISEE pursuant to this Agreement whether before or after termination of this Agreement and pay COMPANY any Royalty or Advertising Fund contribution due thereon in the amount and manner required by this Agreement.
- (e) Deliver to COMPANY (electronically, if so requested by COMPANY) within ten (10) days of termination: (i) all files and records in respect to client services, research and development data provided to, or maintained by, FRANCHISEE through the System; (ii) all records, lists, and information concerning or relating to client accounts and prospective clients, and employees of FRANCHISEE; (iii) all other information maintained by FRANCHISEE, whether in written or electronic form, with respect to said clients, prospective clients, and employees; and (iv) all copies of COMPANY's Operations Manual, video tapes, and all other materials bearing the Marks or otherwise belonging to COMPANY.
- (f) Immediately refrain and desist from the use of the Franchised Business's telephone number or numbers and, at the option of COMPANY, transfer and assign the right to use such number or numbers to COMPANY or COMPANY's designee and to take such action as may be required by BBF to transfer and assign to BBF or its designee all telephone numbers and white and yellow page telephone references and advertisements as set forth on the Conditional Assignment of Telephone Numbers annexed hereto as Exhibit 4.
- (g) Immediately refrain and desist from the use of the Center premises from which the Franchised Business was operating and, upon the option of COMPANY, assign to COMPANY or COMPANY's designee the lease and right to use such premises pursuant to which assignment FRANCHISEE shall remain liable for all obligations to landlord accrued or derived from any date on or before the date of the assignment and COMPANY or COMPANY's designee, whichever is the assignee, shall assume only those obligations accruing after the date of such assignment.
- (h) Not disclose to any person, firm, or corporation any of the trade secrets or confidential data furnished to FRANCHISEE by COMPANY, it being agreed that the term "trade secrets or confidential data" shall mean information communicated to FRANCHISEE by COMPANY and other data and information made available to FRANCHISEE in the operation of the Franchised Business, including, but not limited to, the Operations Manual, procedures, protocols, practices, forms, instructions, methods of operations, training programs, contracts, advertising, sales promotion programs, service programs, and other information so denoted elsewhere in this Agreement.
- (i) Irrevocably refrain and desist from the use of any trade secrets or confidential data or information made available to FRANCHISEE in the operation of the
Franchised Business, including but not limited to refraining and desisting from acting as a consultant or service provider to any current or future franchisee within the System's network utilizing any such information.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, upon termination of the Franchise Agreement, the franchisee must cease operating the franchised business and discontinue using Brain Balance's names, marks, trade names, trademarks, or logos. The franchisee is also required to promptly change their business name to exclude "Brain Balance®" or "BBF" or any similar marks.
Financially, the franchisee must promptly pay all outstanding debts to Brain Balance, including royalties and advertising fund contributions. If the termination results from the franchisee's default, they are liable for all damages, costs, and expenses incurred by Brain Balance in obtaining injunctive relief, including reasonable attorney's fees, as well as all royalty and advertising fund contributions for the entire unperformed term of the agreement.
Additionally, the franchisee must endeavor to collect all accounts receivable and file reports, paying Brain Balance any due royalty or advertising fund contributions. Within ten days of termination, the franchisee must deliver all client service files and records, research and development data, client and prospective client information, employee records, and copies of the Operations Manual and other proprietary materials to Brain Balance. The franchisee must also cease using the Franchised Business's telephone number and transfer it to Brain Balance or its designee, including all related telephone references and advertisements as outlined in the Conditional Assignment of Telephone Numbers.
If the franchisee leases office space, the lease should contain a clause allowing Brain Balance to assume the lease obligations upon termination. This includes the option for Brain Balance to replace the franchisee and take possession of the leased space or assign the lease to a third party. The franchisee is required to execute a Conditional Assignment of Lease, granting Brain Balance the right to their interest in the lease, which Brain Balance can freely assign to another party.