Are Brain Balance franchisees prohibited from soliciting employees of the Brain Balance business for employment after the termination of the Franchise Agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.17. (a) All permanent staff of the Franchised Business shall execute Exhibit 3, the Confidentiality, Non-Solicitation, and Non-Compete Agreement as provided in the Operations Manual.
FRANCHISEE will take such action in connection therewith as may be required by COMPANY both during and upon termination of this Agreement in order to protect any trade secrets that are proprietary to COMPANY or any information, knowledge, or know-how deemed confidential under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, all permanent staff of a franchised Brain Balance business are required to sign a Confidentiality, Non-Solicitation, and Non-Compete Agreement. The franchisee is obligated to take actions required by Brain Balance both during and upon termination of the Franchise Agreement to protect trade secrets and confidential information. This suggests that there are post-termination restrictions regarding the solicitation of Brain Balance employees, as the Non-Solicitation Agreement remains in effect even after the franchise agreement is terminated.
This requirement ensures that franchisees cannot actively recruit or hire current employees of the Brain Balance system, which protects the company's investment in training and development. It also helps maintain stability within the Brain Balance network by preventing the loss of experienced staff to competing businesses or former franchisees. The specifics of what constitutes solicitation and the duration of the non-solicitation period would be detailed in the actual agreement (Exhibit 3) referenced in the FDD.
Prospective franchisees should carefully review Exhibit 3, the Confidentiality, Non-Solicitation, and Non-Compete Agreement, to fully understand the scope and limitations of these restrictions. Understanding the terms of the agreement is crucial for franchisees to avoid potential legal issues and to plan their business operations accordingly. Franchisees should also seek legal counsel to clarify any ambiguities or concerns regarding the enforceability of these provisions in their specific jurisdiction.
It is important to note that the FDD excerpt does not provide the full text of Exhibit 3, so franchisees must obtain and review the complete agreement to fully understand their obligations. This includes understanding the duration of the non-solicitation period, the definition of "solicitation," and any exceptions to the restriction. Franchisees should also be aware of the potential consequences of violating the non-solicitation agreement, which could include legal action and financial penalties.