After termination of the Brain Balance agreement, are franchisees prohibited from diverting business from other Brain Balance franchisees to a competitive establishment?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.17. (a) All permanent staff of the Franchised Business shall execute Exhibit 3, the Confidentiality, Non-Solicitation, and Non-Compete Agreement as provided in the Operations Manual.
FRANCHISEE will take such action in connection therewith as may be required by COMPANY both during and upon termination of this Agreement in order to protect any trade secrets that are proprietary to COMPANY or any information, knowledge, or know-how deemed confidential under this Agreement.
(b) FRANCHISEE or its principal must have satisfactorily completed the Initial Training Program.
10.18. (a) FRANCHISEE's proposed Center location, relocation, center layout, office equipment, all printed matter used in the operation of the Franchised Business, including without limitation, assessment tools, tests, evaluation forms, stationery, signage, application forms, business cards, invoices, statements, and other materials, and the manner in which any of these will be
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, franchisees are required to have all permanent staff sign a Confidentiality, Non-Solicitation, and Non-Compete Agreement, as detailed in the Operations Manual. This agreement remains in effect even after the termination of the franchise agreement. The franchisee is obligated to take necessary actions to protect Brain Balance's trade secrets and confidential information, both during and after the agreement's termination. This suggests that measures are in place to prevent the diversion of business to a competitive establishment, although the specific terms of the non-compete agreement are found in Exhibit 3 and the Operations Manual, which are not included in this excerpt.
The FDD excerpt specifies that upon termination of the agreement, the franchisee must cease operating the Franchised Business and discontinue using Brain Balance's names, marks, and logos. This prevents a former franchisee from leveraging the Brain Balance brand to attract customers to a competing business.
However, the provided excerpts do not explicitly detail the specific restrictions on soliciting other Brain Balance franchisees' business post-termination. For a comprehensive understanding of these restrictions, prospective franchisees should review Exhibit 3 (the Confidentiality, Non-Solicitation, and Non-Compete Agreement) and the Operations Manual, and directly ask Brain Balance about the specific terms and duration of the non-compete obligations to fully understand their post-termination responsibilities and limitations.