What happens if a Brain Balance franchisee stops operating their Standard BB Center?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE acknowledges that the Franchise granted hereunder is limited to the establishment and operation of the Franchised Business in a single location within the Territory and requires FRANCHISEE to maintain and continue to operate its Standard BB Center. FRANCHISEE may not operate the Franchised Business from an additional location or outside of the Territory unless a separate franchise agreement is signed by the parties and an additional Initial Franchise Fee (as hereinafter defined) is paid by FRANCHISEE to COMPANY. If FRANCHISEE stops operating or loses its right to operate the Standard BB Center,
FRANCHISEE must either obtain FRANCHISOR's approval to convert the Franchised Business to a standard Brain Balance® Center, which will not be unreasonably withheld but will require FRANCHISEE to sign a franchise agreement for a standard Center and pay the difference between the initial franchise fee paid by FRANCHISEE under this Agreement and the then-current initial franchise fee for a Standard BB Center, or must stop operating the Franchised Business.
- (l) FRANCHISEE abandons, fails to renew, or otherwise loses the right to operate or stops operating the Standard Brain Balance Center and fails to convert the Franchised Business into a standard Brain Balance Center within a period of 30 days from the date of non-operation of the Standard Brain Balance Center.
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.
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."
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 stops operating their Standard BB Center, they have two options. First, the franchisee can seek approval from Brain Balance to convert the business into a standard Brain Balance Center. Approval will not be unreasonably withheld; however, the franchisee must sign a new franchise agreement for a standard center and pay the difference between the initial franchise fee already paid and the current initial franchise fee for a standard Brain Balance Center.
Alternatively, if the franchisee does not convert the business, they must cease operating the Franchised Business altogether. Furthermore, if a Brain Balance franchisee abandons, fails to renew, loses the right to operate, or stops operating the Standard Brain Balance Center and does not convert it to a standard Brain Balance Center within 30 days of ceasing operations, it is considered a breach of contract.
In the event of such a breach, Brain Balance has the option to terminate the franchise agreement with only five days' written notice, without granting an opportunity to remedy the breach. Upon termination, the franchisee must cease operating the Brain Balance business, discontinue using Brain Balance's names and marks, and refrain from implying any former association with Brain Balance.