What obligations does a Brain Balance franchisee retain after transferring the franchise?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
COMPANY's written approval of the proposed sale to the named purchaser, if given, shall be conditioned upon the following:
(f) FRANCHISEE shall have paid to COMPANY all monies due and payable pursuant to this Agreement.
(d) Promptly endeavor to collect all accounts receivable and file reports with respect thereto that derive from services provided by FRANCHISEE pursuant to this Agreement whether before or after termination of this Agreement and pay COMPANY any Royalty or Advertising Fund contribution due thereon in the amount and manner required by this Agreement.
(e) FRANCHISEE shall have paid to COMPANY a Transfer Fee, the amount of $10,000 for the training, supervision, administration, accounting, legal, and/or other expenses of COMPANY in connection with the assignment and transfer.
(g) FRANCHISEE's transferee shall have paid to COMPANY a Software Agreement transfer fee equal to $2,500.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, a franchisee has several obligations to Brain Balance after transferring their franchise. The franchisee must pay all monies owed to Brain Balance under the Franchise Agreement. This includes any outstanding royalty and advertising fund contributions.
Additionally, the franchisee is responsible for collecting all accounts receivable and filing reports related to services provided before and after the transfer. They must also pay Brain Balance any royalty or advertising fund contributions due on these receivables.
Finally, the franchisee is obligated to pay Brain Balance a transfer fee of $10,000. They must also ensure their transferee pays a Software Agreement transfer fee of $2,500. These fees cover Brain Balance's expenses for training, supervision, administration, accounting, and legal costs associated with the transfer.