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Until it wears off or falls off its user, it reflects any opponent's projectiles, energy-based or not. As the item will not stay on a character for the duration of a match, players must be sure to notice when it disappears from their character's body. The Franklin Badge cannot be broken like other reflectors; if a projectile overloads the Franklin Badge, it will simply either be absorbed or pass through the character.
This usage differs from how the Franklin Badge appears in the Mother series, however; they are only able to block PK Beam in EarthBound Beginnings, and PK Thunder in EarthBound and Mother 3. All other PSI moves and projectiles are not affected by whether a character is wearing a Franklin Badge or not.
There is also a special Brawl setting called "Reflect" in which all characters wear permanent Franklin Badges, rendering all projectiles virtually useless – a projectile reflected back at its user will simply be reflected again, which has the potential to cause an interesting "Ping-Pong" effect.