After termination of the Brain Balance agreement, for how long are franchisees prohibited from diverting business or clients 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)
Based on the 2025 Franchise Disclosure Document, Brain Balance requires all permanent staff of the franchised business to execute a Confidentiality, Non-Solicitation, and Non-Compete Agreement, as detailed in the Operations Manual. The franchisee is obligated to take necessary actions, both during and after the agreement's termination, to protect Brain Balance's trade secrets and confidential information.
However, the FDD excerpt does not specify the exact duration of the non-compete clause or the geographic scope of the restriction after the termination of the franchise agreement. The agreement mentions that the specifics of the non-compete are found in Exhibit 3 and the Operations Manual, which are not included in this excerpt.
Therefore, a prospective Brain Balance franchisee should carefully review Exhibit 3 and the Operations Manual to understand the specific terms of the non-compete agreement, including its duration, geographic scope, and any other limitations. It is also advisable to seek legal counsel to fully understand the implications of these restrictions.