What happens if a Brain Balance franchisee fails to pay their bills and obligations on time?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
10.04. FRANCHISEE shall pay on a timely basis all of its bills and obligations; federal, state, and local and other expenses; and all taxes of the Franchised Business.
FRANCHISEE shall not create or incur any expenses chargeable to COMPANY without COMPANY's prior written approval.
6.03. Late Payment
- (a) If FRANCHISEE shall fail to pay to COMPANY when due any Royalty, Advertising Fund contribution, or any other payment required to be made pursuant to this Agreement, interest shall accrue on the unpaid amount commencing fifteen (15) days after the due date, at a rate of two percent (2%) per month compounded or the highest rate permitted under applicable law, whichever is less.
- (b) If FRANCHISEE shall fail to pay to COMPANY when due any Royalty, Advertising Fund contribution, or any other payment due hereunder, or fails to file any report required to be filed with COMPANY, and such failure continues for a period of thirty (30) days after COMPANY has provided FRANCHISEE with a written demand for performance, in addition to all of its other rights and remedies hereunder, COMPANY may suspend all services required to be performed by COMPANY on behalf of FRANCHISEE hereunder, until such time as FRANCHISEE has made payment of all amounts due to COMPANY and has filed all reports with COMPANY required to be filed by FRANCHISEE.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees are obligated to pay all bills, obligations, federal, state, and local expenses, and taxes related to the franchised business on a timely basis. Franchisees are prohibited from creating or incurring expenses chargeable to Brain Balance without prior written approval.
If a Brain Balance franchisee fails to pay any Royalty, Advertising Fund contribution, or any other payment when due, interest will accrue on the unpaid amount starting fifteen days after the due date. The interest rate is set at two percent per month compounded, or the highest rate permitted under applicable law, whichever is less.
Furthermore, if the failure to pay continues for thirty days after Brain Balance provides a written demand for performance, Brain Balance may suspend all services it is required to perform on behalf of the franchisee. This suspension will remain in effect until the franchisee has paid all outstanding amounts and filed all required reports. However, Brain Balance's decision to suspend services does not relieve the franchisee of their ongoing obligations under the Franchise Agreement, nor does it constitute a termination of the agreement.