What is the amount of Liquidated Damages payable to All Dogs Unleashed, and when is it due?
All_Dogs_Unleashed Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages | 4 years' worth of projected Royalty Fees | On our termination based upon your material default. | Payable only if you prematurely cease operations or wrongfully terminate the franchise agreement, or if we terminate the franchise agreement for cause. |
Notes:
Note 2. "Gross Sales" means the total of all revenue and receipts derived from the operation of the Franchised Business, including receipts from the sale of products and services and membership fees and the proceeds of any business interruption insurance. Gross Sales does not include revenue received from the sale of stored value cards (but the redemption value will be included in "Gross Sales" when the stored value card is redeemed at your Facility). Gross Sales also does not include the amount of any sales or similar tax that is added to the selling price and actually paid to the taxing authority. The amount of any customer refunds may be deducted from Gross Sales if the charge was previously included in Gross Sales. | Royalty Fee | 7% of Gross Sales | Monthly | See Note 2 |
Source: Item 6 — OTHER FEES (FDD pages 9–12)
What This Means (2025 FDD)
According to All Dogs Unleashed's 2025 Franchise Disclosure Document, liquidated damages are payable to All Dogs Unleashed in the event of premature cessation of operations, wrongful termination of the franchise agreement by the franchisee, or termination of the franchise agreement by All Dogs Unleashed due to the franchisee's material default.
The amount of these liquidated damages is equivalent to four years' worth of projected Royalty Fees. The Royalty Fee is 7% of Gross Sales. Gross Sales means the total of all revenue and receipts derived from the operation of the Franchised Business, including receipts from the sale of products and services and membership fees and the proceeds of any business interruption insurance. Gross Sales does not include revenue received from the sale of stored value cards (but the redemption value will be included in "Gross Sales" when the stored value card is redeemed at your Facility). Gross Sales also does not include the amount of any sales or similar tax that is added to the selling price and actually paid to the taxing authority. The amount of any customer refunds may be deducted from Gross Sales if the charge was previously included in Gross Sales.
This means that if a franchisee were to close their All Dogs Unleashed location early or otherwise breach the franchise agreement, they would be responsible for paying All Dogs Unleashed an amount equal to the royalty fees All Dogs Unleashed projected they would have received over the subsequent four years. This payment is due immediately upon termination of the agreement based on the franchisee's material default. Prospective franchisees should carefully consider this potential liability and ensure they have a solid business plan and sufficient capital to operate the franchise for the entire term of the agreement.