After termination of the Brain Balance agreement, what is the geographic radius within which franchisees are prohibited from engaging in a competing business?
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.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
Based on the 2025 Brain Balance Franchise Disclosure Document, the FDD does not specify a geographic radius within which a franchisee is prohibited from engaging in a competing business after the termination of the franchise agreement. However, the document does state that all permanent staff of the Franchised Business must execute a Confidentiality, Non-Solicitation, and Non-Compete Agreement as provided in the Operations Manual. The franchisee is obligated to take action to protect trade secrets and confidential information, both during and after the termination of the agreement.
Item 22 of the FDD discusses various aspects of the franchise agreement, including the franchisee's obligations and restrictions. While it outlines the franchisee's responsibilities regarding the use of Brain Balance's trademarks and trade names, it does not provide specific details about post-termination non-compete restrictions such as geographic radius or time period. The FDD mentions that franchisees must cease operating the Franchised Business and refrain from using Brain Balance's names and marks after termination.
Because the specific geographic radius for post-termination non-compete is not detailed in the provided FDD excerpts, prospective franchisees should carefully review Exhibit 3, the Confidentiality, Non-Solicitation, and Non-Compete Agreement, mentioned in section 10.17(a). Additionally, it would be prudent to seek clarification from Brain Balance regarding the specific terms and conditions of the non-compete agreement, including the duration and geographic scope of the restrictions, to fully understand their obligations after the franchise agreement ends.