Under what conditions can Brain Balance assign its agreement and rights?
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 Brain Balance's 2025 Franchise Disclosure Document, if a franchisee leases office space for their Brain Balance business, the lease must include a conditional assignment clause. This clause allows Brain Balance or its affiliates to assume the lease obligations if the franchise agreement expires or terminates for any reason. Brain Balance has the option to exercise this clause within 30 days of the termination or expiration date. They can then either take over the lease, replace the franchisee, or assign the lease to another party.
As part of this process, the franchisee must sign a Conditional Assignment of Lease, which transfers all rights and interests in the lease to Brain Balance. This assignment can be freely transferred by Brain Balance to another person or 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 retains control over the location of its franchises, even if a franchisee's agreement ends. This is a fairly standard practice in franchising, as it protects the brand's presence and allows for a smooth transition if a franchisee exits the system. Prospective franchisees should carefully review the lease agreement and the Conditional Assignment of Lease to understand their obligations and the potential for Brain Balance to assume the lease.