What specific actions constitute a 'default' by the franchisee under the Brain Balance franchise agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
(j) FRANCHISEE is in breach of any of the terms or conditions of the Software Agreement;
(k) FRANCHISEE is in breach of any of the agreements with supplier(s) designated by COMPANY for purchase of equipment, advertising materials, services or other supplies, products, and materials required for the operation of the Franchised Business; or
(l) FRANCHISEE abandons, fails to renew, or otherwise loses the right to operate or stops operating the Standard Brain Balance Center and fails to convert the Franchised Business into a standard Brain Balance Center within a period of 30 days from the date of non-operation of the Standard Brain Balance Center.
17.03. (a) Upon the occurrence of an Event of Default, COMPANY, at its option, may terminate this Agreement on five (5) days' written notice (or a notice for a longer period of time as may be required by the law of the jurisdiction in which FRANCHISEE's Center is located) without a right to cure, and this Agreement, together with the Franchise granted hereunder, shall thereupon expire.
(b) Upon the occurrence of an Event of Default that continues for thirty (30) or more days of COMPANY giving FRANCHISE notice of such default, COMPANY shall have the absolute right without additional notice, to cease providing or making available any or all services and benefits provided for hereunder to FRANCHISEE until FRANCHISEE is current in the payment of fees and the filing of reports and has cured all other defaults.
COMPANY's exercise of such right shall not diminish FRANCHISEE's continuing obligations under this Agreement or constitute an actual or constructive termination of this Agreement.
- 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)
According to Brain Balance's 2025 Franchise Disclosure Document, a franchisee can be in default of the franchise agreement for several reasons. These include breaching the terms of the Software Agreement or breaching agreements with designated suppliers for equipment, advertising materials, services, or other required supplies. Additionally, default occurs if the franchisee abandons, fails to renew, loses the right to operate, or stops operating the standard Brain Balance Center and does not convert the franchised business into a standard Brain Balance Center within 30 days of non-operation.
If a franchisee defaults, Brain Balance has the option to terminate the agreement with only five days' written notice, without providing an opportunity to cure the default, although the notice period may be longer depending on local laws. Alternatively, if the default continues for 30 or more days after Brain Balance provides notice, Brain Balance can cease providing services and benefits to the franchisee until the franchisee becomes current with payments, files required reports, and cures all other defaults.
It is important to note that Brain Balance's decision to withhold services does not relieve the franchisee of their ongoing obligations under the agreement, nor does it constitute a termination of the agreement. Upon termination, the franchisee must cease operating as a Brain Balance franchise, stop using Brain Balance's names and marks, change their name to exclude any Brain Balance branding, and promptly pay all outstanding debts to Brain Balance.