Under what condition can Brain Balance terminate the agreement if a court modifies a provision?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
21.02. Each provision of this Agreement shall be considered severable and if for any reason any provision is deemed to be invalid or contrary to an existing or future law or regulation, it shall not impair the operation or affect the remaining provisions of this Agreement, which shall continue to be given full force and effect, and any invalid provision shall be deemed not to be a part of this Agreement. If any one or more provisions of this Agreement is found to be unreasonably restrictive by a court of competent jurisdiction, then such provisions shall be modified by the court so that they apply to the maximum extent permitted by law, and any such modification shall not affect the validity of any other provision contained in this Agreement. Notwithstanding the foregoing, if COMPANY determines that any such determination by a court adversely affects the basic consideration of the Agreement, COMPANY at its option, may terminate this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, Brain Balance can terminate the franchise agreement if a court modifies a provision of the agreement and Brain Balance determines that the court's determination adversely affects the basic consideration of the agreement. This means that if a court alters any part of the agreement in a way that Brain Balance believes undermines the fundamental reasons for the agreement, Brain Balance has the option to end the agreement.
This clause protects Brain Balance from being bound by an agreement that has been significantly changed by a court ruling. It ensures that the company retains control over the core elements of its franchise system. The franchisee should understand that any legal challenges to the franchise agreement that result in modifications could lead to termination, even if the franchisee prevails in court on some points.
This type of clause is relatively common in franchise agreements, as franchisors seek to maintain uniformity and protect their business model. However, it also presents a risk to the franchisee, who could lose their franchise even after a court decision if Brain Balance deems the modification unacceptable. Prospective franchisees should carefully consider this provision and seek legal counsel to understand their rights and obligations.