If an Aplus franchisee terminates the agreement without cause before the expiration date, is Aplus entitled to liquidated damages?

According to Aplus's 2024 Franchise Disclosure Document, if a franchisee terminates the agreement without cause prior to the expiration date, Aplus is entitled to collect damages from the franchisee. The FDD states that both in the event of a franchisee-initiated termination without cause, or a franchisor-initiated termination due to the franchisee's material default, Aplus will suffer damages for the loss of the benefit bargained for in the agreement and irreparable damage to the integrity of the franchise system.

As partial compensation for these damages, Aplus is entitled to collect from the franchisee. This compensation is intended to cover the damages Aplus incurs due to the early termination, acknowledging the loss of anticipated benefits and potential harm to the franchise system's reputation.

This clause highlights a significant financial risk for franchisees considering early termination. It's important for prospective franchisees to fully understand the conditions under which termination can occur and the potential financial repercussions. Franchisees should seek legal counsel to evaluate the implications of this clause and explore options for mitigating potential damages in the event of an unavoidable early termination.