Under the Brain Balance agreement, can the licensee obligate or bind the licensor in any manner?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
nment to COMPANY and expressly provide that there are no obligations imposed on or granted against COMPANY. FRANCHISEE shall open the Center within nine (9) months of the date of this Agreement.
10.04. FRANCHISEE shall pay on a timely basis all of its bills and obligations; federal, state, and local and other expenses; and all taxes of the Franchised Business. FRANCHISEE shall not create or incur any expenses chargeable to COMPANY without COMPANY's prior written approval.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to the 2025 Brain Balance Franchise Disclosure Document, franchisees are explicitly prohibited from creating or incurring any expenses chargeable to Brain Balance without prior written approval. This provision ensures that franchisees cannot obligate Brain Balance financially without the company's explicit consent. This protects Brain Balance from unauthorized financial liabilities incurred by its franchisees.
Furthermore, the lease agreement for the Brain Balance center must contain provisions that permit assignment to Brain Balance and expressly state that there are no obligations imposed on or granted against Brain Balance. This requirement ensures that Brain Balance is not bound by any lease obligations or liabilities entered into by the franchisee. This protects Brain Balance from potential legal or financial burdens related to the franchisee's lease agreements.
In general, these types of stipulations are common in franchise agreements to protect the franchisor from liabilities created by franchisees. Prospective Brain Balance franchisees should carefully review the franchise agreement and related documents to fully understand the scope of their obligations and limitations regarding their ability to bind the franchisor.