Under what circumstances are liquidated damages payable by an All Dogs Unleashed franchisee, and how are they calculated?
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 All Dogs Unleashed's 2025 Franchise Disclosure Document, liquidated damages may be payable by a franchisee under specific circumstances related to the termination of the franchise agreement. These damages are triggered 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.
The liquidated damages are calculated as four years' worth of projected Royalty Fees. This means that if a franchisee breaches the agreement in a way that leads to termination, they could be liable for a significant sum representing the royalties All Dogs Unleashed expected to receive over the subsequent four years.
This provision serves to protect All Dogs Unleashed from financial losses resulting from early termination or default by a franchisee. Prospective franchisees should carefully consider this clause, as it could result in substantial financial penalties if they fail to meet their obligations under the franchise agreement or decide to exit the business prematurely. It is important to fully understand the conditions that constitute a material default and the potential financial implications before entering into a franchise agreement with All Dogs Unleashed.