How much are the Liquidated Damages a Best Brains franchisee must pay?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages | $30,000 | As incurred | FA Sec. 7(H). |
| (See Note 5) |
- 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, as liquidated damages, $30,000.
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, a franchisee may have to pay liquidated damages. 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 must pay $30,000 in liquidated damages. This payment is due by the effective date of termination.
Liquidated damages are designed to compensate the franchisor for losses incurred due to early termination, covering costs like lost future royalties and the expense of finding a new franchisee. The fee is intended to cover the damages incurred by Best Brains due to the early termination of the agreement.
As shown in Item 6, the liquidated damages are listed alongside other fees such as the Technology Fee, Brand Development Fund, and Subject Material Fee. The $30,000 liquidated damages are due as incurred, according to FA Sec. 7(H).