Does the restriction on diverting Brain Balance clients to a competitive establishment apply regardless of the reason for termination of the Franchise Agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.04.
Upon the termination of this Agreement, whether as a result of an Event of Default or for any other reason, FRANCHISEE shall:
- (a) Cease to be a FRANCHISEE, cease to operate the Franchised Business, and refrain and desist from using the names and Marks and all other marks, trade names, trademarks, or logos of COMPANY, or such names or logos similar thereto, in any manner whatsoever, including, without limitation, together with other words such as "formerly known as."
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
Based on the 2025 Brain Balance Franchise Disclosure Document, upon termination of the Franchise Agreement, regardless of the reason, a franchisee must cease operating the Franchised Business and discontinue using Brain Balance's names, marks, and logos. This includes refraining from using similar names or logos in any manner.
This requirement means that whether the termination occurs due to a franchisee's default or any other reason, the franchisee is obligated to stop all operations related to the Brain Balance system. They must also cease using any branding associated with Brain Balance. This prevents any potential confusion or association with the Brain Balance brand after the franchise agreement ends.
This provision is typical in franchising to protect the brand's integrity and prevent former franchisees from unfairly competing using the franchisor's established reputation and intellectual property. A prospective Brain Balance franchisee should understand that these post-termination obligations are comprehensive and legally binding, ensuring a clean break between the franchisee and the Brain Balance system upon termination of the agreement.