What must a Brain Balance franchisee's office space lease contain?
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. Provided FRANCHISEE is in full compliance with the terms hereof, the term of this Agreement may be renewed for an additional five (5) year term unless at least three (3) months but not more than six (6) months prior to the expiration of the Initial Term or any extension thereof notice of intention to finally terminate is given in writing by registered mail by FRANCHISEE to COMPANY. No Initial Franchise Fee (as hereinafter defined) is charged upon the extension of the term; however, FRANCHISEE will be required to pay a renewal fee of Ten Thousand Dollars ($10,000).
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 specific provisions to protect the franchisor's interests. The lease must contain a conditional assignment clause, which should be substantially 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 obligations 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 another party.
To facilitate this, the franchisee must execute a Conditional Assignment of Lease, also found in Exhibit 5, which assigns all rights and interests in the lease to Brain Balance. This assignment can be freely transferred by Brain Balance to another person or entity, including someone who might operate a Brain Balance business at that location or within the territory.
Additionally, the lease must permit assignment to Brain Balance and explicitly state that there are no obligations imposed on or granted against Brain Balance. The franchisee must 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 franchisee is required to open the Brain Balance center within nine months of the date of the Franchise Agreement.