If I breach any covenants in the agreement with Brain Balance, what happens to the restriction period?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- In the event of a breach of any of the covenants set forth in this Agreement, the running of the period of the restriction shall be tolled during the continuation of any such breach, and the running of the period of such restrictions shall commence only upon compliance with the terms of the applicable paragraph.
I agree that each of my agreements set forth is reasonable and necessary to protect and preserve the business, interests and properties of Company and in the event of a breach of any of my agreements, Company shall be entitled to both temporary and permanent injunctions to prevent a breach or contemplated breach of any of my agreements and the Company also retains the right to seek other relief, including damages, which shall be the greater of the amount of the financial loss which Company suffers as a result or the amount of the financial gain which I receive. I will pay Company's reasonable attorney's fees and costs involved in enforcing this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, if a franchisee breaches any covenants within the franchise agreement, the restriction period will be paused for the duration of the breach. The restriction period will only begin once the franchisee complies with the terms of the agreement.
This means that any actions prohibited by the franchise agreement, such as soliciting clients or employees, will effectively extend the time the franchisee is bound by those restrictions. The restrictions do not count the time during which the franchisee is in violation.
Brain Balance also has the right to seek both temporary and permanent injunctions to prevent breaches or contemplated breaches of the agreement. Additionally, Brain Balance can pursue other relief, including damages, which will be the greater of the financial loss suffered by Brain Balance or the financial gain received by the franchisee as a result of the breach. The franchisee will also be responsible for covering Brain Balance's reasonable attorney's fees and costs associated with enforcing the agreement.