What happens if a Brain Balance franchisee breaches the Software Agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
(j) FRANCHISEE is in breach of any of the terms or conditions of the Software Agreement;
(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
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, a breach of the Software Agreement by a franchisee constitutes an event of default under the franchise agreement. If a Brain Balance franchisee violates any terms or conditions outlined in the Software Agreement, 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. Upon termination, the franchise and all rights granted to the franchisee immediately expire.
In addition to immediate termination, Brain Balance has the right to cease providing any services or benefits to the franchisee if the default continues for 30 or more days after the franchisee receives notice of the default. This cessation of services can include withholding support and resources normally provided to franchisees. However, Brain Balance's decision to withhold services does not relieve the franchisee of their ongoing obligations under the Franchise Agreement, nor does it constitute a termination of the agreement unless Brain Balance explicitly terminates it.
Upon termination of the Franchise Agreement, the franchisee must cease operating the Brain Balance center and discontinue using any of Brain Balance's names, marks, logos, or other intellectual property. The franchisee is also required to change the name of their business to one that does not include "Brain Balance®" or "BBF" or any similar marks. Furthermore, the franchisee is responsible for promptly paying all outstanding debts to Brain Balance, including any unpaid royalties or advertising fund contributions. Brain Balance can also seek a court order to prevent any breach or threatened breach of the agreement, and the franchisee may be prevented from continuing to operate the franchised center.