Does the liquidated damages clause in the Anago franchise agreement prevent Anago from seeking other damages caused by the franchisee's breach?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
nd agents as Your agent and attorney in fact, which appointment is coupled with an interest and is irrevocable, to act for and on Your behalf to execute, verify, and file any such documents and to do all other lawfully permitted acts to further the purposes of this Section 4.11 with the same legal force and effect as if executed by You. The obligations of this Section 4.11 shall survive any expiration or termination of the Agreement.
SECTION 4.12 LIQUIDATED DAMAGES FOR SALE OF PROHIBITED PRODUCTS OR SERVICES.
You agree that the offer to sell or the sale of unauthorized or prohibited products and services within the Anago System or operation of Your Unit Franchise will result in damages to Us. You agree these damages will be measured as $100 for each day that You offer or sell unauthorized or prohibited products or services, payable to Us upon demand. These damages are in addition to Our other rights including Our right to strictly enforce or terminate this Agreement as provided
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to the 2025 Anago Franchise Disclosure Document, the liquidated damages clause related to the sale of unauthorized products or services does not prevent Anago from seeking other remedies. Specifically, if a franchisee offers or sells unauthorized products or services within the Anago system, they will incur damages of $100 for each day they engage in such activities.
This liquidated damages provision is in addition to Anago's other rights, which include the right to enforce or terminate the agreement and obtain injunctive relief. The only exception to this is if other rights are excluded by law in light of this specific section of the agreement. Anago and the franchisee agree that calculating the full extent of damages from unauthorized products and services is difficult, and the liquidated damages provide certainty and are considered reasonable rather than a penalty.
This means that while Anago can collect $100 per day for the sale of prohibited items, they are not limited to only this remedy. They can still pursue other legal options to address the franchisee's breach of contract, such as seeking an injunction to stop the unauthorized sales or terminating the franchise agreement altogether. A prospective franchisee should be aware that this liquidated damages clause does not cap Anago's potential recovery for breaches related to unauthorized products or services.