If a Brain Balance franchisee fails to make a payment, is that considered an event of default?

According to Brain Balance's 2025 Franchise Disclosure Document, failure to make payments constitutes an event of default. Specifically, if a Brain Balance franchisee fails to make any payment when due, as required by the terms of the Franchise Agreement or any other agreement between the franchisee and Brain Balance, it is considered an event of default. However, this failure must continue for more than fifteen days after Brain Balance provides notice to the franchisee. The default period may be longer if required by law.

This clause is significant for prospective Brain Balance franchisees because it outlines the financial obligations that must be met to remain in good standing with the franchisor. Failing to meet these payment obligations can lead to serious consequences, including termination of the franchise agreement. The fifteen-day notice period provides a limited window for franchisees to rectify the situation and avoid further action by Brain Balance.

In addition to payment defaults, other events can trigger a default status, such as violating any term, provision, or condition of the Franchise Agreement, failing to open the franchised business on time, or damaging Brain Balance's reputation. Franchisees should carefully review the franchise agreement to understand all the conditions that could lead to an event of default and the potential ramifications.