What outstanding debts must a Brain Balance franchisee promptly pay upon termination?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) Promptly pay to COMPANY all debts, including any outstanding Royalty and Advertising Fund contribution, arising from FRANCHISEE's obligations under this
Agreement, which shall upon termination for any default by FRANCHISEE include all damages, costs, and expenses, including reasonable attorney's fees, incurred by COMPANY in obtaining injunctive relief for the enforcement of any provision of this Agreement as a result of the default and all Royalty and Advertising Fund contributions for the entire unperformed term of 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.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, upon termination of the Franchise Agreement, a franchisee must promptly pay all outstanding debts to Brain Balance. This includes any outstanding Royalty and Advertising Fund contributions that arose from the franchisee's obligations under the agreement.
If the termination is due to the franchisee's default, the debts include all damages, costs, and expenses, including reasonable attorney's fees, incurred by Brain Balance in obtaining injunctive relief to enforce any provision of the Franchise Agreement. It also includes all Royalty and Advertising Fund contributions for the entire unperformed term of the agreement.
Additionally, the franchisee is obligated to collect all accounts receivable for services provided before or after termination and pay Brain Balance any Royalty or Advertising Fund contribution due on those receivables, as required by the Franchise Agreement. This means that even after the franchise is terminated, the franchisee has a continuing financial obligation to Brain Balance related to outstanding accounts and future royalties on those accounts.