Under what conditions will Brain Balance allow an assignment of the Franchise Agreement?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of (i) a default under the Lease by Assignor, (ii) a default under the Agreement by Assignor, or (iii) the expiration and termination of the Agreement for any reason whatsoever, Assignee shall have the option to accept this Assignment and replace Assignor as tenant under the Lease pursuant to the terms set forth herein by providing an Assignment Notice (as defined in Section 6) to Landlord.
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the franchise agreement can be conditionally assigned under specific circumstances related to the lease of the premises. This assignment is outlined in a Conditional Assignment of Lease agreement involving Brain Balance (the Franchisor/Assignee), the franchisee (Assignor), and the Landlord. The franchisee conditionally assigns their rights, title, and interest in the lease and any security deposit to Brain Balance.
As long as certain conditions are not met, the franchisee retains all rights, privileges, and obligations as the tenant under the lease. The landlord is required to provide Brain Balance with a 15-day written notice before any modification, amendment, or cancellation of the lease. Additionally, the landlord must provide Brain Balance copies of any default notices given to the franchisee within three days of notifying the franchisee. Brain Balance has the option, but not the obligation, to cure any default under the lease within fifteen days after the franchisee's cure period expires.
Brain Balance has the option to accept the assignment and replace the franchisee as the tenant under the lease if (i) the franchisee defaults under the lease, (ii) the franchisee defaults under the Franchise Agreement, or (iii) the Franchise Agreement expires or terminates for any reason. To exercise this option, Brain Balance must provide an Assignment Notice to the Landlord, indicating their intent to take over the lease. This conditional assignment ensures that Brain Balance can maintain control over the location of the franchise in the event of franchisee default or termination, which protects the brand's presence and continuity.