Does the Brain Balance non-compete agreement apply regardless of the cause of termination, expiration, or non-renewal?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
18.02. (a) Throughout the term of this Agreement, and for a period of two (2) years after termination, regardless of cause of the termination, expiration, or non-renewal, neither FRANCHISEE nor any of its officers, directors, shareholders, members, or partners shall divert, or attempt to divert, any business of, or any clients of, the Business to any other competitive establishment, by direct or indirect inducement or otherwise.
(b) Throughout the term of this Agreement, and for a period of two (2) years after termination, regardless of cause of the termination, expiration, or non-renewal, neither FRANCHISEE nor any of its officers, directors, shareholders, members, or partners shall divert, or attempt to divert, any business of, or any clients of, COMPANY or any other franchisee or affiliate of COMPANY to any other competitive establishment, by direct or indirect inducement or otherwise.
(c) Throughout the term of this Agreement, and for a period of two (2) years after termination, regardless of cause of the termination, expiration, or non-renewal, neither FRANCHISEE nor any of its officers, directors, shareholders, members, or partners shall, directly or indirectly, seek for employment, employ, or attempt to employ any person who is at the time employed by the Business or otherwise directly or indirectly induce such persons to leave their employment.
(d) Throughout the term of this Agreement, and for a period of two (2) years after termination, regardless of cause of the termination, expiration, or non-renewal, neither FRANCHISEE nor any of its officers, directors, shareholders, members, or partners shall, directly or indirectly, seek for employment, employ, or attempt to employ any person who is at the time employed by COMPANY or any franchisee or affiliate of COMPANY or otherwise directly or indirectly induce such persons to leave their employment.
18.03. Throughout the term of this Agreement and after its termination, regardless of the cause of termination, expiration, or upon non-renewal, neither FRANCHISEE nor any of its officers, directors, shareholders, members, or partners shall communicate, divulge, or use for the benefit of any other person, partnership, association, or corporation any confidential information, knowledge, trade secrets, proprietary information, or private processes of COMPANY, or any information or knowledge concerning the methods of operation utilized in the Business.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the non-compete agreement applies regardless of the reason for termination, expiration, or non-renewal of the franchise agreement. Specifically, the franchisee and its officers, directors, shareholders, members, or partners are restricted from engaging in certain competitive activities. These restrictions are in place both during the term of the agreement and for a period of two years after the agreement ends, irrespective of how it ends.
These restrictions include not diverting or attempting to divert business or clients of the Brain Balance center to any other competitive establishment. This means a franchisee cannot actively try to take customers away from Brain Balance to a competing business. Similarly, the franchisee is prohibited from diverting or attempting to divert business or clients of Brain Balance or any other franchisee or affiliate of Brain Balance to another competitive establishment. This clause protects not only the franchisor but also other franchisees within the Brain Balance system.
Additionally, the franchisee is barred from seeking to employ, employing, or attempting to employ anyone who is currently employed by the Brain Balance business. They also cannot indirectly induce such persons to leave their employment. Furthermore, the franchisee is prohibited from communicating, divulging, or using any confidential information, knowledge, trade secrets, proprietary information, or private processes of Brain Balance for the benefit of any other person or entity. This includes information about the methods of operation utilized in the Brain Balance business.
These non-compete and confidentiality clauses are standard in franchising to protect the brand, customer base, and proprietary information of the franchise system. A prospective Brain Balance franchisee should carefully review these restrictions to understand the limitations on their activities both during and after the franchise agreement, as these could significantly impact their future business endeavors.