What provisions must the lease contain for a Brain Balance franchise?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE shall obtain prior written approval from COMPANY of the lease, sign the lease within 120 days of the execution of this Agreement, and provide a copy of the executed lease to COMPANY within ten (10) days of its execution. The lease shall contain provisions that permit assignment to COMPANY and expressly provide that there are no obligations imposed on or granted against COMPANY.
3.05. In the event FRANCHISEE leases office space for the Franchised Business, such lease shall contain a conditional assignment clause, substantially similar to the template provided in Exhibit 5, that shall provide that upon the expiration or sooner termination of this Agreement, for any reason contained herein, the FRANCHISOR or its Affiliates shall have the option, exercisable within thirty (30) days after said expiration or termination, to assume the obligations of the lease, to replace FRANCHISEE and enter into possession under said lease or at any time prior thereto or thereafter to assign or reassign the lease to a third party. In connection therewith, FRANCHISEE shall execute a Conditional Assignment of Lease in the form attached hereto as Exhibit 5 (the "Assignment") pursuant to which Assignment FRANCHISEE has assigned to FRANCHISOR all its right, title, and interest in the lease for the Franchised Business. FRANCHISEE acknowledges that such Assignment is freely assignable by FRANCHISOR to any other person or entity, including any person or entity that may acquire the right to operate a Brain Balance® business in and from said office location or otherwise within the Territory.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, franchisees must secure a lease that includes specific provisions to protect the franchisor's interests. The lease must allow for assignment to Brain Balance, meaning that the company can take over the lease under certain conditions. Additionally, the lease must explicitly state that no obligations are imposed on or granted against Brain Balance. This protects the franchisor from any liabilities or responsibilities related to the franchisee's lease agreement.
Furthermore, if a Brain Balance franchisee leases office space, the lease must contain a conditional assignment clause, which should be similar to the template provided in Exhibit 5 of the FDD. This clause gives Brain Balance or its affiliates the option to assume the lease obligations within 30 days of the agreement's expiration or termination. Brain Balance can then replace the franchisee, take possession of the leased space, or assign the lease to another party. The franchisee is required to execute a Conditional Assignment of Lease, assigning all rights and interests in the lease to Brain Balance, which Brain Balance can then freely assign to another entity, such as someone acquiring the right to operate a Brain Balance business in that location.
These lease provisions are designed to give Brain Balance maximum flexibility and control over the location of its franchises. By ensuring that the lease can be easily transferred or assumed by the company, Brain Balance can protect its brand and maintain continuity of operations even if a franchisee exits the system. Prospective franchisees should carefully review Exhibit 5 and understand the implications of these lease requirements before signing a franchise agreement. It is also important to note that the franchisee must obtain prior written approval from Brain Balance of the lease, sign the lease within 120 days of the execution of the Franchise Agreement, and provide a copy of the executed lease to Brain Balance within ten days of its execution.