When are liquidated damages payable to All Dogs Unleashed?
All_Dogs_Unleashed Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks | |
|---|---|---|---|---|
| Enforcement Costs and Attorneys’ Fees | Actual fees incurred | Payable as incurred | Payable only if we incur a loss related to your operation of the Facility. | |
| Indemnification | Amount of loss suffered | Upon demand | You must reimburse us and pay our attorneys’ fees and related costs if we incur a loss relating to your operation of the Franchised Business. | |
| Insurance | Reimbursement of premium costs plus an administrative fee of 15% | Upon demand | Payable only if you fail to maintain minimum insurance coverage and we elect to procure insurance on your behalf. | |
| 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 All Dogs Unleashed's 2025 Franchise Disclosure Document, liquidated damages are payable in specific instances related to the termination or cessation of operations of the franchise agreement. These damages, calculated as four years' worth of projected Royalty Fees, become due to All Dogs Unleashed under the following conditions: if the franchisee prematurely ceases operations, wrongfully terminates the franchise agreement, or if All Dogs Unleashed terminates the franchise agreement due to the franchisee's material default.
This provision means that a franchisee could face significant financial penalties for prematurely ending the franchise agreement or failing to meet its obligations. The liquidated damages are designed to compensate All Dogs Unleashed for the anticipated future royalty fees they would have received had the franchisee continued to operate the business as agreed. The fact that the liquidated damages are based on projected royalty fees means that All Dogs Unleashed will estimate what the franchisee would have paid over the four year period.
Prospective franchisees should carefully consider these conditions and the potential financial implications before entering into a franchise agreement with All Dogs Unleashed. Understanding the circumstances under which liquidated damages may be imposed is crucial for managing risk and ensuring compliance with the terms of the franchise agreement. It is also important to understand how the 'projected Royalty Fees' are calculated, as this will directly impact the amount of liquidated damages the franchisee may be required to pay.