When transferring a Brain Balance franchise, what must be assigned or transferred along with the franchise interest?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
d within one hundred twenty (120) days after delivery of such offer to COMPANY, or upon substantially the same terms of the sale as specified in such offer, COMPANY shall again have the right of first refusal as herein provided.
COMPANY's written approval of the proposed sale to the named purchaser, if given, shall be conditioned upon the following:
- (a) Only the entire interest of FRANCHISEE under this Agreement may be assigned or transferred, and the entire interest of FRANCHISEE or its affiliated parties in the Standard BB Center must also be assigned and transferred to the same party.
- (b) Unless the assignee or transferee is a franchisee of COMPANY, the assignee or transferee shall undertake and successfully complete COMPANY's Initial Training Program at a location designated by COMPANY at the assignee or transferee's expense.
- (c) The proposed assignee or transferee shall meet the standards then imposed by COMPANY for new franchisees and shall demonstrate to COMPANY's satisfaction the ability to operate the business being transferred. FRANCHISEE shall provide COMPANY with a resume, credit check, and all such other information reasonably required by COMPANY with respect to the proposed assignee or transferee who shall be personally interviewed at a location designated by COMPANY at no cost to COMPANY.
- (d) The assignee or transferee executing both (x) a new 10-year franchise agreement in the form being used at the time by COMPANY for this franchise program, which agreement shall govern the rights and obligations of the parties, provided, however, the purchaser will not be obliged to pay an Initial Franchise Fee, and the Royalty as set forth in this Agreement shall not be altered, and (y) such other documents as COMPANY shall reasonably request in form and substance satisfactory to COMPANY.
- (e) FRANCHISEE shall have paid to COMPANY a Transfer Fee, the amount of $10,000 for the training, supervision, administration, accounting, legal, and/or other expenses of COMPANY in connection with the assignment and transfer. This Transfer Fee shall be collected for the combined transfer of the Standard BB Center and thi
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, if a franchisee seeks to transfer their franchise, they must transfer their entire interest in the franchise agreement. Additionally, the franchisee's entire interest in the Standard BB Center must also be assigned and transferred to the same party. This means that a franchisee cannot sell off parts of the franchise piecemeal; the whole business operation must be transferred together.
Brain Balance requires that the franchised business be transferred in its entirety to ensure brand consistency and operational integrity. This prevents a situation where a franchisee might try to retain a portion of the business while transferring the brand rights, which could lead to confusion or inconsistent service.
This requirement is conditional upon Brain Balance giving written approval of the proposed sale to the purchaser. This approval is contingent on several factors, including the transferee completing the Initial Training Program (unless they are an existing franchisee), meeting Brain Balance's standards for new franchisees, and executing a new 10-year franchise agreement. The transferee must also pay a Software Agreement transfer fee of $2,500. The franchisee must also pay Brain Balance a $10,000 transfer fee and all outstanding monies owed to Brain Balance.
In effect, Brain Balance maintains tight control over who can become a franchisee and ensures that any new owner is fully trained and committed to the brand's standards. This protects the brand's reputation and the interests of other franchisees within the system.