Under what circumstances can Brain Balance assign its agreement?
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 the 2025 Brain Balance Franchise Disclosure Document, if a franchisee leases office space for their Brain Balance business, the lease must contain a conditional assignment clause. This clause allows Brain Balance or its affiliates the option to assume the lease obligations, replace the franchisee, or assign the lease to a third party if the franchise agreement expires or terminates. This option is exercisable within 30 days of the expiration or termination of the agreement.
The franchisee is required to execute a Conditional Assignment of Lease, which assigns all rights, title, and interest in the lease to Brain Balance. This assignment can be freely transferred by Brain Balance to another entity, including someone who may acquire the right to operate a Brain Balance business at that location or within the territory.
This clause ensures that Brain Balance has control over the location of its franchises, even if a franchisee's agreement ends. It allows Brain Balance to maintain a presence in a particular area by transferring the lease to a new franchisee or operating the location themselves. This is a fairly common practice in franchising, as it protects the brand's market presence and customer base.