Is there a Conditional Assignment of Lease agreement required to be signed in connection with the Brain Balance Franchised Business?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
3.05. In the event FRANCHISEE leases office space for the Franchised Business, such lease shall contain a conditional assignment clause, substantially similar to the template provided in Exhibit 5, that shall provide that upon the expiration or sooner termination of this Agreement, for any reason contained herein, the FRANCHISOR or its Affiliates shall have the option, exercisable within thirty (30) days after said expiration or termination, to assume the obligations of the lease, to replace FRANCHISEE and enter into possession under said lease or at any time prior thereto or thereafter to assign or reassign the lease to a third party. In connection therewith, FRANCHISEE shall execute a Conditional Assignment of Lease in the form attached hereto as Exhibit 5 (the "Assignment") pursuant to which Assignment FRANCHISEE has assigned to FRANCHISOR all its right, title, and interest in the lease for the Franchised Business. FRANCHISEE acknowledges that such Assignment is freely assignable by FRANCHISOR to any other person or entity, including any person or entity that may acquire the right to operate a Brain Balance® business in and from said office location or otherwise within the Territory.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, if a franchisee leases office space for their Brain Balance center, the lease must include a conditional assignment clause. This clause allows Brain Balance, or its affiliates, the option to assume the lease obligations if the Franchise Agreement expires or terminates. This option can be exercised within 30 days of the agreement's expiration or termination.
In connection with this clause, the franchisee is required to execute a Conditional Assignment of Lease, using the form attached as Exhibit 5 in the FDD. This assignment transfers all of the franchisee's rights, title, and interest in the lease to Brain Balance.
Brain Balance has the right to freely assign this lease to any other person or entity, including someone who may acquire the right to operate a Brain Balance business at that location or within the territory. This ensures that Brain Balance can maintain control over the location of its franchises, even if the original franchisee leaves the system.