For Beggars Pizza, what is included in the calculation of the early termination fee?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Any termination by Customer (other than for SpeedLine's uncured material breach of this Agreement as set forth in this Section 11.b or pursuant to Section 15) and any termination by SpeedLine for Customer's breach, prior to the end of the Initial Term or, as applicable, the current Renewal Term, will subject Customer to an early termination (acceleration) fee by way of liquidated damages and not as a penalty for lost Subscription Fee revenue to SpeedLine for the remainder of the Initial Term or Renewal Term, as the case may be.
The early termination fee will be (a) the amount of all Subscription Fees that would be due for the remainder of the then current contract Term (that is the Initial Term or the current Renewal Term), plus (b) any other fees or amounts due (for example, for professional services).
Source: Item 23 — RECEIPT (FDD pages 39–192)
What This Means (2025 FDD)
According to the 2025 Beggars Pizza FDD, the early termination fee calculation includes a couple of components. Specifically, the early termination fee will consist of the sum of two parts. The first part is the total amount of all Subscription Fees that would have been due for the remainder of the current contract term, whether it's the Initial Term or a Renewal Term. The second part includes any other outstanding fees or amounts owed, such as those for professional services.
This means that if a Beggars Pizza franchisee terminates the agreement early or if SpeedLine terminates the agreement due to the franchisee's breach, the franchisee will be responsible for not only the subscription fees for the remaining period but also any additional fees incurred. This early termination fee is described as liquidated damages and not a penalty, which means it's intended to compensate SpeedLine for lost revenue due to the early termination.
It is important to note that this early termination fee applies to terminations by the customer (franchisee) for reasons other than SpeedLine's uncured material breach or pursuant to Section 15, and to terminations by SpeedLine due to the customer's breach. This provision ensures that SpeedLine is compensated for the financial loss resulting from the premature end of the agreement, while also outlining the specific conditions under which the fee is applicable.