If a Brain Balance franchisee is transferring rights to the same assignee, what section of the agreement outlines the assignment or transfer terms?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
16.02. If FRANCHISEE is also transferring its rights in the Standard BB Center to the same assignee, FRANCHISEE may assign or transfer this Agreement, pursuant to the terms of this Section 16. FRANCHISEE may not assign or transfer this Agreement or any rights or interests herein or in the Franchised Business or any assets of the Franchised Business other than in the ordinary course of business or a partnership interest therein, or if FRANCHISEE is a corporation or an LLC, all or part of the equity of the corporation or LLC, except upon COMPANY's prior written consent, which will not be unreasonably withheld. FRANCHISEE must first obtain a bona fide, signed, unconditional, and firm written offer from a responsible and fully identified purchaser and shall submit a complete copy of such offer to COMPANY together with COMPANY's current application for franchise completed by the prospective purchaser. Such offer must be limited to this Agreement and the Franchised Business and may not include the purchase of any other property. Prior to any such assignment or transfer, a right of first refusal to acquire the entire right or interest of FRANCHISEE in the Franchised Business proposed to be assigned or transferred shall be offered by FRANCHISEE to COMPANY on the same terms and conditions offered to the proposed assignee or transferee provided that COMPANY may substitute cash for any form of payment proposed in such offer and provided that COMPANY's credit shall be deemed equal to the credit of any proposed purchaser, and COMPANY shall have not less than thirty (30) days
from the exercise of its option to consummate the transaction. COMPANY shall have not less than thirty (30) nor more than one-hundred and twenty (120) days following the receipt of such offer to exercise its right to purchase.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, Section 16.02 of the franchise agreement outlines the terms for assignment or transfer of the agreement if the franchisee is also transferring rights in the Standard BB Center to the same assignee. This section indicates that the franchisee may assign or transfer the agreement under the terms specified in Section 16.
However, the franchisee cannot assign or transfer the agreement, any rights or interests in the franchised business, or any assets of the franchised business outside the ordinary course of business without Brain Balance's prior written consent, which will not be unreasonably withheld. The franchisee must first obtain a bona fide, signed, unconditional, and firm written offer from a responsible and fully identified purchaser and submit a complete copy of such offer to Brain Balance, along with Brain Balance's current franchise application completed by the prospective purchaser. The offer must be limited to the agreement and the franchised business and cannot include the purchase of any other property.
Prior to any assignment or transfer, Brain Balance has a right of first refusal to acquire the franchisee's entire right or interest in the franchised business on the same terms and conditions offered to the proposed assignee or transferee. Brain Balance may substitute cash for any form of payment proposed in the offer, and Brain Balance's credit is deemed equal to the credit of any proposed purchaser. Brain Balance has between thirty and one hundred twenty days following receipt of the offer to exercise its right to purchase.