What specific rights are conditionally assigned to Brain Balance under the Assignment?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
nee"), FRANCHISEE (hereinafter "Assignor") and Landlord, with respect to the Lease for the Premises used by FRANCHISEE in the operation of the Franchise in the Franchised Territory covered by the Agreement. Nothing in this Assignment shall be deemed to make Landlord a party to the Agreement.
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- Assignor conditionally assigns to the Assignee all the Assignor's right, title, and interest in (a) the Lease and (b) the security deposit, if any, stated in the Lease, all subject to the terms hereof.
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- As long as the conditions set forth in Section 5 are not met, Assignor shall have all rights, privileges and obligations as the tenant under the Lease.
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- Landlord shall provide Assignee with (i) fifteen (15) days' written notice prior to any modification, amendment or cancellation of the Lease, and (ii) copies of any written notices of default given to Assignor under the Lease within three (3) days of Landlord's giving such notice to Assignor. Landlord grants to Assignee, at Assignee's option, the right (but not the obligation) to cure any default under the Lease within fifteen (15) days after the expiration of the period in which Assignor may cure the default, if Assignor fails to do so. Notwithstanding any action by Assignee to cure Assignor's default under the Lease, Assignor shall be deemed to be in default under the Lease for purposes of this Assignment.
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- In the event of (i) a default under the Lease by Assignor, (ii) a default under the Agreement by Assignor, or (iii) the expiration and termination of the Agreement for any reason whatsoever, Assignee shall have the option to accept this Assignment and replace Assignor as tenant under the Lease pursuant to the terms set forth herein by providing an Assignment Notice (as defined in Section 6) to Landlord.
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- If the Assignee elects to exercise its option to accept the assignment of the Lease and replace Assignor as tenant under the Lease pursuant to the terms set forth in this Assignment, it shall provide written notice of such acceptance to the Landlord (the "Assignment Notice"). Upon
Assignee's providing the Assignment Notice, Assignee shall become the tenant of the leased Premises and shall become liable for all obligations under the Lease arising after the date of the Assignment Notice. Landlord shall recognize Assignee as the tenant of the leased Premises effective as of the date of the Assignment Notice. If the Assignee elects to exercise its option to accept the assignment of the Lease, it agrees that the obligations assumed shall benefit the Landlord named in the Lease.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, the franchisee (Assignor) conditionally assigns certain rights to Brain Balance (Assignee) related to the lease of the premises used for the franchise. Specifically, Brain Balance receives conditional assignment of the rights, title, and interest in the lease and any security deposit stated in the lease. However, the franchisee retains all rights, privileges, and obligations as the tenant under the lease as long as the conditions outlined in Section 5 of the agreement are not met.
These conditions, which trigger Brain Balance's option to accept the assignment and replace the franchisee as the tenant, include a default under the lease by the franchisee, a default under the Franchise Agreement by the franchisee, or the expiration and termination of the Franchise Agreement for any reason. If any of these events occur, Brain Balance can provide an Assignment Notice to the landlord and become the tenant, assuming all obligations under the lease from that point forward. The landlord agrees to recognize Brain Balance as the new tenant once the Assignment Notice is provided.
Additionally, the landlord must provide Brain Balance with fifteen days' written notice before any modification, amendment, or cancellation of the lease. The landlord must also provide Brain Balance copies of any written notices of default given to the franchisee within three days of notifying the franchisee. Brain Balance has the option, but not the obligation, to cure any default under the lease if the franchisee fails to do so, with a fifteen-day window after the franchisee's cure period expires. It is important to note that even if Brain Balance acts to cure a default, the franchisee is still considered in default under the lease for the purposes of the assignment.
Furthermore, Brain Balance also receives conditional assignment of the franchisee's telephone listing and numbers used for the franchised business. The franchisee retains the right to use these telephone numbers while the Franchise Agreement is in effect, but this right expires upon termination of the agreement for any reason. This assignment is freely transferable by Brain Balance to any person or entity, ensuring that Brain Balance can maintain control over the business's contact information even if the franchise changes hands.