Does the non-compete agreement with Brain Balance apply if my association is terminated for cause?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
belongs to Company if it relates to Company's business. If any such development or creation occurs during my employment or up to one year after I leave Company, I will promptly disclose and explain it and assign to Company all rights I may have in it without additional compensation.
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- During the term of my association with the Company and for a period of one year after termination of my association with the Company either (i) voluntarily by me or (ii) for cause, I agree that I shall not directly or indirectly, whether as employee, owner, partner, stockholder, member, investor, agent or consultant, render competing services on my own behalf or on behalf of any person or entity other than the Company.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the non-compete agreement applies if your association is terminated for cause. Specifically, during the term of your association with Brain Balance and for one year after termination, whether the termination is voluntary or for cause, you are restricted from rendering competing services. This restriction applies whether you are an employee, owner, partner, stockholder, member, investor, agent, or consultant.
This means that even if Brain Balance terminates your franchise agreement due to your default or a breach of contract, you are still bound by the non-compete clause for one year following the termination. This could significantly limit your ability to work in a similar field or business within the specified timeframe.
Furthermore, the agreement specifies that for a period of one year after termination, whether voluntary or for cause, you cannot engage in competing services within a thirty-five (35) mile radius of Brain Balance's office located at a specified address. The exact address is not provided in the excerpt, but this geographical restriction adds another layer to the non-compete agreement, potentially limiting where you can work or start a similar business after leaving the Brain Balance franchise system. A prospective franchisee should confirm the exact address with Brain Balance to fully understand the geographic scope of the non-compete.
It is important to note that the agreement is governed by California law, and the document includes provisions addressing the interpretation and enforceability of the agreement. If any part of the agreement is found to be invalid, the rest of it will be enforced to the extent permitted, and any excessively broad provisions will be limited to preserve enforceability. This suggests that while the non-compete is intended to be binding, its specific terms could be subject to legal interpretation and potential modification to ensure it is reasonable and enforceable under California law.