What must Brain Balance provide to a franchisee after the material modification application is registered in California?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
Before the franchisor can ask you to materially modify your existing franchise agreement, Section 31125 of the California Corporations Code requires the franchisor to file a material modification application with the Department that includes a disclosure document showing the existing terms and the proposed new terms of your franchise agreement.
Once the application is registered, the franchisor must provide you with that disclosure document with an explanation that the changes are voluntary.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, if a franchisee in California is asked to materially modify their existing franchise agreement, Brain Balance must first file a material modification application with the California Department of Financial Protection and Innovation. This application must include a disclosure document that shows both the existing terms and the proposed new terms of the franchise agreement.
Once this application is registered, Brain Balance is required to provide the franchisee with that disclosure document. This document is crucial because it outlines the specific changes being proposed to the franchise agreement.
In addition to providing the disclosure document, Brain Balance must also give the franchisee an explanation that the changes to the franchise agreement are voluntary. This ensures that the franchisee understands they are not obligated to accept the modifications and can make an informed decision.