How is the liquidated damages fee calculated for All Dogs Unleashed?
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. |
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 12–16)
What This Means (2025 FDD)
According to the 2025 FDD, All Dogs Unleashed specifies that liquidated damages are calculated as four years' worth of projected royalty fees. This fee is payable if the franchisee prematurely ceases operations, wrongfully terminates the franchise agreement, or if All Dogs Unleashed terminates the franchise agreement for cause.
This means that if a franchisee breaches the agreement in a way that leads to termination or cessation of operations, All Dogs Unleashed is entitled to compensation equivalent to the royalty fees they would have collected over the next four years. This is designed to cover the franchisor's losses resulting from the franchisee's early exit.
For a prospective All Dogs Unleashed franchisee, this highlights the importance of fulfilling the terms of the franchise agreement. The liquidated damages provision serves as a significant financial disincentive against non-compliance or premature termination. Franchisees should carefully consider their ability to meet the obligations of the franchise agreement to avoid potentially substantial liquidated damages.
It is important for potential franchisees to fully understand how the projected royalty fees are calculated, as this will directly impact the amount of liquidated damages owed. Further clarification on the method used to project these fees should be sought from All Dogs Unleashed during the due diligence process.