Does the restriction on diverting business after termination of the Brain Balance agreement apply to diverting business from other Brain Balance franchisees?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
20.02. FRANCHISEE acknowledges that its franchise is one of a number of Brain Balance® Centers using COMPANY's service marks and style of conduct and that the failure on
the part of FRANCHISEE to comply with any of the terms of this Agreement could cause irreparable damage to some or all of the other offices franchised or operated by COMPANY and to COMPANY's business. Therefore, and notwithstanding the provisions contained in Paragraph 20.01 above, FRANCHISEE agrees that upon the happening of any Non-Curable Default or Event of Default set forth in Section 17.01 or 17.02, or in the event of a threatened breach by FRANCHISEE of any of the terms of this Agreement, COMPANY shall have the immediate right to secure a court order enjoining any such default or threatened breach. If this Agreement shall have been terminated, FRANCHISEE may be enjoined from any continued operation of any Center franchised under this Agreement and/or the Franchised Business. This covenant shall be independent and severable and shall be enforceable notwithstanding any other rights or remedies that either party may have.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
Based on the 2025 Brain Balance Franchise Disclosure Document, the agreement states that franchisees acknowledge that their franchise is one of many Brain Balance centers utilizing the company's service marks and style of conduct. The FDD indicates that failure to comply with the terms of the agreement could cause irreparable damage to other franchised or company-operated offices, as well as to Brain Balance's overall business.
Specifically, the agreement states that Brain Balance has the right to secure a court order to prevent any default or threatened breach of the agreement. If the franchise agreement is terminated, the franchisee may be prohibited from continuing to operate any center franchised under the agreement or the franchised business itself. This covenant is independent and severable and enforceable regardless of other rights or remedies available to either party.
While this section emphasizes the protection of Brain Balance's brand and network, the FDD excerpt does not explicitly state whether the restrictions on diverting business after termination apply to diverting business from other Brain Balance franchisees. A prospective franchisee should seek clarification from the franchisor regarding this specific scenario to fully understand the scope of post-termination restrictions and obligations.