What happens if a Brain Balance franchisee breaches agreements with designated suppliers?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
reflects an understatement of GR as reported to COMPANY of five percent (5%) or more for any calendar year;
- (j) FRANCHISEE is in breach of any of the terms or conditions of the Software Agreement; or
- (k) FRANCHISEE is in breach of any of the agreements with supplier(s) designated by COMPANY for purchase of equipment, advertising materials, services or other supplies, products, and materials required for the operation of the Franchised Business.
- 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.
- 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;
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 breaches any agreements with suppliers designated by Brain Balance for purchasing equipment, advertising materials, services, or other required supplies, products, and materials, it constitutes an event of default under the franchise agreement.
Upon such a breach, Brain Balance has the option to terminate the franchise agreement with only five days' written notice. This termination can occur without the franchisee having an opportunity to correct the breach, although the notice period may be longer if required by local jurisdiction. If Brain Balance does not elect to terminate the agreement immediately, they can cease providing services and benefits to the franchisee after a 30-day notice period until the franchisee resolves the default and is current with all payments and reports. However, Brain Balance's decision to withhold services does not waive the franchisee's ongoing obligations under the agreement.
Upon termination of the agreement, the franchisee must cease operating the Brain Balance center, discontinue using Brain Balance's names and marks, and change the center's name to exclude any Brain Balance branding. The franchisee must also promptly pay all outstanding debts to Brain Balance, including royalties and advertising fund contributions. Brain Balance also has the right to seek a court order to prevent any breach or threatened breach of the agreement, which could include preventing the franchisee from continuing to operate the center.