For how long after termination of a Brain Balance Franchise Agreement are franchisees prohibited from diverting business from the franchised business to a competitive establishment?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
Throughout the term of the Franchise Agreement, and for a period of one (1) year after either termination – regardless of the cause of the termination – expiration, or non-renewal, neither you nor any of your officers, directors, shareholders, members, or partners, as appropriate, shall divert or attempt to divert, any business of, or any clients of, the Franchised Business or any other Franchisee or affiliate of BBF to any other competitive establishment, by direct or indirect inducement or otherwise.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD pages 51–53)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees are restricted from diverting business from the franchised Brain Balance business to a competitive establishment for one year after the termination, expiration, or non-renewal of the Franchise Agreement. This restriction applies regardless of the reason for termination. The prohibition extends not only to the franchisee but also to their officers, directors, shareholders, members, or partners.
This means that for a full year after leaving the Brain Balance franchise system, a former franchisee and their associated parties cannot actively try to take clients away from their former Brain Balance center, any other Brain Balance franchisee, or any Brain Balance affiliate. This includes both direct and indirect methods of inducement. This provision aims to protect Brain Balance's business and client base from unfair competition by former franchisees who might try to leverage their knowledge and relationships gained during their time as a franchisee.
In addition to the restriction on diverting business, the FDD also states that for one year after termination, franchisees are prohibited from engaging in the supplemental education services business within a 50-mile radius of their former Brain Balance center. There is also a restriction on employing or attempting to employ anyone employed by Brain Balance or its franchisees for a period of two years after termination. These measures are in place to further safeguard Brain Balance's interests and prevent former franchisees from using their experience to directly compete with the franchise system.