After termination of the Brain Balance agreement, for how long are franchisees prohibited from diverting business from Brain Balance 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.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document for Brain Balance states that all permanent staff of the franchised business must execute a Confidentiality, Non-Solicitation, and Non-Compete Agreement, as detailed in the Operations Manual. The franchisee is obligated to take actions required by Brain Balance, both during and after the agreement's termination, to protect trade secrets and confidential information. However, the FDD does not specify the exact duration of the non-compete agreement for franchisees after termination.
While the FDD mentions the existence of a non-compete agreement, it does not provide details on the length of the restricted period or the geographic scope of the non-compete obligations. The specific terms of the non-compete agreement are likely outlined in Exhibit 3 and the Operations Manual, which are referenced but not included in the provided excerpts.
Therefore, a prospective Brain Balance franchisee should carefully review Exhibit 3 and the Operations Manual to understand the specific restrictions and duration of the non-compete agreement. It is essential to clarify these details before signing the franchise agreement to fully understand the post-termination obligations and restrictions.