Under the Brain Balance franchise agreement, how can a term of the agreement be waived, modified, or canceled?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
20.01. Except as provided in Section 20.02 below, COMPANY and FRANCHISEE agree that any and all disputes between them, and any claim by either party that cannot be amicably settled (including tort as well as contract claims, claims based upon any federal, state, or local statute, law, order, ordinance, or regulations, and claims arising from any relationship prior to, at the time of entering, during the term of, or upon or after expiration or termination of this Agreement) except for claims relating to the Marks or other service marks or commercial symbols of COMPANY, shall be determined solely and exclusively by arbitration under the Federal Arbitration Act, as amended, and in accordance with the rules then obtaining of the American Arbitration Association or any successor at its office located in San Francisco, ou, unless the parties otherwise agree in writing. COMPANY and FRANCHISEE consent to personal jurisdiction and hereby waive all objections to personal jurisdiction or venue for the purpose of carrying out the purposes of this Paragraph 20.01. The arbitrator(s) may not under any circumstance: (i) stay the effectiveness of any pending termination; (ii) assess punitive, speculative, or exemplary damages; or (iii) make any award that extends, modifies, or suspends any lawful term of this Agreement or any reasonable standard of business performance set by COMPANY in good faith. The arbitrator(s) shall be limited to the issues in dispute between COMPANY and FRANCHISEE and a dispute between any other franchisee and COMPANY shall not be considered in the same arbitration proceeding or by the same arbitrator(s). The parties shall each bear their own expense, including but not limited to all fees and expenses of the arbitrator(s), the American Arbitration Association, attorneys, and accountants. Judgment upon any award of the arbitrator(s) shall be conclusive and binding and shall be entered in a court of competent jurisdiction.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
Based on the 2025 Brain Balance Franchise Disclosure Document, the terms of the franchise agreement can only be modified or waived through a written agreement between Brain Balance and the franchisee. Specifically, Section 20.01 states that the arbitrator(s) in any dispute resolution cannot make any award that extends, modifies, or suspends any lawful term of the Agreement or any reasonable standard of business performance set by Brain Balance in good faith. This implies that modifications can only occur through mutual written consent outside of arbitration.
This requirement for written modification is a standard practice in franchising. It protects both the franchisor and franchisee by ensuring that any changes to the original agreement are clearly documented and agreed upon by both parties. This prevents misunderstandings or disputes that could arise from verbal agreements or informal arrangements. For a prospective Brain Balance franchisee, this means that any desired changes to the franchise agreement must be formally requested and approved in writing by Brain Balance.
It is important for a potential Brain Balance franchisee to understand that the franchise agreement is a legally binding document. While there may be opportunities to negotiate certain terms before signing the agreement, any modifications after the agreement is in place will require the franchisor's written consent. Franchisees should carefully review the franchise agreement and seek legal counsel to fully understand their rights and obligations.