When is the liquidated damages fee due to Best Brains if the franchisee terminates improperly?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Business premises. We have 30 days after termination or expiration of this Agreement to exercise this option.
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- Adhere to the provisions of the 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, if a franchisee terminates the agreement in a manner not permitted by Section 7.A, or if Best Brains terminates the agreement according to Section 7.B, the franchisee must pay $30,000 in liquidated damages. This payment is due by the effective date of the termination.
The FDD clarifies that this liquidated damages fee is intended to compensate Best Brains for the early termination and the resulting loss of revenue. It is not intended to cover other breaches of the agreement or any other damages Best Brains might incur, for which Best Brains retains all applicable remedies.
This clause highlights the importance of adhering to the termination terms outlined in the franchise agreement. Franchisees should carefully consider the conditions under which they are permitted to terminate to avoid incurring this significant liquidated damages fee. It is also important to note that the liquidated damages only cover the early termination and loss of revenue, and Best Brains can still pursue other remedies for any other breaches of the agreement.