How is the Brain Balance territory defined in the Franchise Agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 12: TERRITORY]
The Territory granted is for a specified area, which may be delineated by boundary streets, highways and other physical boundaries, zip codes, county lines, and/or by governmental lines. You have no options, rights of first refusal, or similar rights to acquire additional franchises within your Territory or contiguous territories under the Franchise Agreement. If you wish to acquire an additional franchise, you must sign another Franchise Agreement.
You must operate your Center from one business location, except that if you operate a Satellite Center you are permitted to provide intake services for your Satellite Center customers at your standard Center location and conduct certain other administrative functions for the Satellite Center at the standard Center location. You must receive our written permission before relocating. The location or relocation of your Franchised Business must be approved by us. The considerations for approval of your Center site are described in Item 11. If you wish to relocate your Center, you will be required to pay a relocation fee and sign a general release if a release is permitted by state law. We can refuse to approve your request for relocation.
Except for this Territory, the Franchise is non-exclusive, and we and our affiliates retain the right, among others:
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- To establish or operate, and grant franchises for others to establish or operate, Brain Balance® Centers or other businesses offering the Brain Balance Program® or other products or services under the Marks (as defined in Item 13) or any other marks, at any location outside the Territory, regardless of proximity to your Center.
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- Within and outside the Territory, to market, sell, or distribute, or to contract with others to market, sell, or distribute, any services of any kind (including books, audio tapes, video tapes, computer software, and computerized instruction), to any person, organization, or public or private entity, using the Marks or other marks, through any channel of distribution, including through any computer service, email, the Internet, or any computer, television or other electronic device, bookstores or any other retail Centers, mail order, or counseling center.
We grant you the right to operate a Brain Balance® Center at a specific location. If you do not have a location when you sign the Franchise Agreement, then at the time you sign the Franchise Agreement, you will agree to locate your Center within a specified distance from a particular intersection. When you have identified space suitable for a Center you will request approval for this location from us and submit a proposed lease. Once we have approved the location and you have signed the lease with our approval, we will identify that specific location for your Center.
You will receive an exclusive area that consists of the geographic area within which your Franchised Business must be operated. We will not establish or operate, or franchise any entity to establish or operate, a Brain Balance® Center within a certain radius of your Center (the "Territory"). You and we determine the exclusive area. The radius may be smaller, if, for example, your approved location is in or near a metropolitan area or a densely populated area. This Territory is conditional on a certain sales volume, market penetration, or other similar condition as follows: (i) beginning in the first month following the date your Center opened or at the tenth month following the date of your Franchise Agreement if you have not yet opened, your minimum monthly royalty will be at least $1,000; (ii) your gross sales, meaning total sales excluding sales tax and any refunds, must equal at least $400,000 for each twelve (12) month period following the third anniversary of the Franchise Agreement date; and (iii) if you are a transferee of a BBF Franchise Agreement, your gross sales must equal at least $400,000 for each twelve (12) month period following the second anniversary of the date the Franchise Agreement was transferred to you. If you fail to meet this requirement, we have the right to terminate the Franchise Agreement. Other than as stated, there are no circumstances that would permit us to modify your territorial rights.
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- Within the Territory (a) to offer, sell, and provide (and to contract with, or license others to offer, sell, and provide), any products (including, but not limited to nutritional and food products that coordinate with the Brain Balance Program® ), and services of any kind (other than Brain Balance® Center services), under the Marks or other marks; (b) to develop and establish other businesses and systems using marks other than the Marks for any products and services (other than Brain Balance® Center services), and (c) to grant licenses thereto, without providing any rights to you.
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- Within and outside the Territory to acquire, merge with, or otherwise affiliate with, and thereafter own and operate, and franchise or license others to own and operate, any supplemental education service business, including any business that offers products or services that are the same as or similar to those that you provide at your Brain Balance® Center, or any other system or trademarks or service marks. Additionally, BBF, and its affiliates reserve the right to engage in a business other than a supplemental education service business offering programs for individuals with developmental delays. This business can be located within your Territory and can include a business you are prohibited from operating under the Franchise Agreement.
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- Outside the Territory, to offer, sell, and provide (and to contract with, or license, others to offer, sell, and provide), any products and services of any kind (including Brain Balance® Center services), under the Marks or other marks; and to develop and establish other businesses and systems using marks other than the Marks for any products and services, and to grant licenses, without providing any rights in those licenses to you.
Other franchises may solicit and accept customers for their Centers from within the Territory and will not be required to pay compensation for soliciting or accepting customers from within your Territory.
You may not solicit and accept customers from outside your Territory.
Source: Item 12 — TERRITORY (FDD pages 47–49)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the territory granted to a franchisee is a specified area, which may be defined using boundary streets, highways, physical boundaries, zip codes, county lines, and/or governmental lines. A franchisee does not have the option to acquire additional franchises within their territory or in contiguous territories under the Franchise Agreement and must sign another Franchise Agreement to do so. The franchisee must operate their center from one business location, but can operate a Satellite Center and provide intake services for those customers at their standard center location, as well as conduct administrative functions for the Satellite Center at the standard location. Relocation of a Brain Balance center requires written permission, payment of a relocation fee, and signing a general release if permitted by state law, and Brain Balance can refuse a relocation request.
Brain Balance grants the right to operate a center at a specific location. If a location is not determined when signing the Franchise Agreement, the franchisee must agree to locate the center within a specified distance from a particular intersection. The specific location for the center is identified once Brain Balance approves the location and the franchisee has signed the lease. The franchisee receives an exclusive area within which the franchised business must operate, and Brain Balance will not establish or franchise another entity to operate a Brain Balance center within a certain radius of the franchisee's center. The radius of this territory may be smaller in metropolitan or densely populated areas.
This exclusive territory is conditional on meeting certain sales volume and market penetration requirements. Specifically, the minimum monthly royalty must be at least $1,000 beginning in the first month after the center opens or the tenth month after the Franchise Agreement date if the center has not yet opened. Additionally, gross sales must equal at least $400,000 for each 12-month period following the third anniversary of the Franchise Agreement date, or the second anniversary if the franchisee is a transferee. Failure to meet these requirements gives Brain Balance the right to terminate the Franchise Agreement.
Despite the exclusive territory, Brain Balance retains certain rights, including the right to market, sell, or distribute services and products through various channels, including the internet and retail centers, both within and outside the territory. They can also offer products and services other than Brain Balance Center services within the territory, and acquire or affiliate with any supplemental education service business, even those offering similar services to the franchisee's center. Other Brain Balance franchises may solicit and accept customers from within a franchisee's territory without compensation. The franchisee, however, may not solicit and accept customers from outside their territory and may not use unapproved channels of distribution, such as catalog sales or telemarketing.