What is the consequence if Best Brains terminates the agreement pursuant to Section 7.B?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
post-term covenants not to compete and not to solicit;
-
- Abide by any other covenant in this Agreement that requires performance by you after you are no longer a franchisee; and
-
- Within 30 days of termination or expiration, furnish to us satisfactory evidence of your compliance with the foregoing obligations.
- F. Option to Purchase Assets. Upon the termination or expiration of this Agreement, we have a 90 day option to purchase from you some or all of the equipment, supplies, inventory, advertising materials and any items with our Marks for cash at fair market value.
If you and we do not agree upon the amount of the fair market value, then a business appraiser selected by us shall determine the fair market value. The cost of the business appraiser shall be borne equally by us and you.
We have an unrestricted right to assign this option to a third party.
- G. Continuing Obligations. All obligations of yours which expressly or by their nature survive
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, if Best Brains terminates the franchise agreement according to the terms in Section 7.B, the franchisee is subject to specific financial consequences. Specifically, the franchisee must pay Best Brains $30,000 as liquidated damages by the effective date of termination.
The FDD clarifies that this $30,000 payment is considered a fair and reasonable estimate of the damages Best Brains would incur due to the early termination of the agreement. It is acknowledged by both parties that calculating the actual damages from such a breach would be difficult, hence the pre-agreed liquidated damages amount.
It's important to note that these liquidated damages are intended to compensate Best Brains solely for the early termination and the resulting loss of revenue. This payment does not cover any other breaches of the agreement by the franchisee or any other damages Best Brains might incur. Best Brains retains all other applicable remedies for any additional breaches or damages beyond those directly related to the early termination.