Does the Amerispec Inspection Services Franchise Agreement potentially contain a liquidated damages clause?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Item 17. The following disclosures are added to Item 17:
- A. The Franchise Agreement may contain a liquidated damages clause. Under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, the Franchise Agreement may contain a liquidated damages clause. However, this disclosure is specifically applicable to franchises subject to California Franchise Investment Law. The document notes that under California Civil Code Section 1671, certain liquidated damages clauses are unenforceable.
This means that if a franchisee is operating in California, any liquidated damages clause in their Amerispec Inspection Services Franchise Agreement may not be enforceable under California law. Liquidated damages clauses aim to predetermine the amount of damages one party will pay to the other in the event of a breach of contract.
Prospective franchisees should seek legal counsel to understand the implications of any liquidated damages clause within their Franchise Agreement, especially concerning the laws of their specific state. For instance, the FDD also includes an addendum for North Dakota, stating that any provision requiring consent to liquidated damages is null and void under North Dakota Franchise Investment Law.