Does Best Brains consider the liquidated damages for improper termination to be fair and reasonable?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
post-term covenants not to compete and not to solicit;
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- Abide by any other covenant in this Agreement that requires performance by you after you are no longer a franchisee; and
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- 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, Best Brains considers the liquidated damages for improper termination to be fair and reasonable. If a franchisee terminates the agreement outside of the conditions outlined in Section 7.A, or if Best Brains terminates the agreement according to Section 7.B, the franchisee must pay Best Brains $30,000 as liquidated damages by the termination date.
The FDD states that both parties acknowledge that calculating the actual damages from a breach or early termination would be difficult. Therefore, Best Brains and the franchisee agree that the $30,000 liquidated damages are a fair and reasonable estimate of the losses Best Brains would incur.
It is important to note that these liquidated damages are specifically intended to compensate Best Brains for the early termination and the resulting loss of revenue. These damages do not cover any other breaches of the agreement by the franchisee or any other damages incurred by Best Brains, for which Best Brains retains all applicable remedies.