By what date must a Best Brains franchisee pay liquidated damages upon termination?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
amounts that you may owe us.
- Note 5- Liquidated Damages. If you terminate the franchise agreement other than in accordance with the terms of Section 7.A. of the franchise agreement, or if we terminate the franchise agreement pursuant to the terms of Section 7.B. of the franchise agreement, then you shall pay us by the effective date of such termination,
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to the 2025 Best Brains Franchise Disclosure Document, a franchisee must pay liquidated damages by the effective date of termination. If the franchisee terminates the franchise agreement outside the terms of Section 7.A, or if Best Brains terminates the agreement according to Section 7.B, the franchisee is obligated to pay $30,000 in liquidated damages.
This means that upon termination, either initiated by the franchisee under unapproved circumstances or by Best Brains due to a breach of contract, the franchisee will immediately owe $30,000. This payment is meant to cover damages incurred by Best Brains as a result of the termination. The FDD indicates that this requirement is further detailed in Franchise Agreement Section 7(H).
It is important for a prospective Best Brains franchisee to understand the conditions under which termination can occur and the financial implications of such termination. Franchisees should carefully review Sections 7.A and 7.B of the franchise agreement to fully understand their rights and obligations regarding termination, as well as Section 7(H) regarding liquidated damages.