How much are the liquidated damages that a Best Brains franchisee must pay upon termination?
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) |
Source: Item 6 — OTHER FEES (FDD pages 11–15)
What This Means (2025 FDD)
According to Best Brains's 2025 Franchise Disclosure Document, a franchisee may be required to pay liquidated damages of $30,000. This fee is incurred if the franchisee terminates the franchise agreement outside the terms outlined in Section 7.A, or if Best Brains terminates the agreement according to Section 7.B. The liquidated damages are due by the effective date of termination.
Liquidated damages are designed to compensate the franchisor for losses resulting from early termination, such as lost future royalties and the costs of finding a replacement franchisee. The FDD indicates this is covered in FA Sec. 7(H).
It is important for prospective Best Brains franchisees to carefully review Sections 7.A and 7.B of the franchise agreement to fully understand the conditions under which termination may occur and the resulting financial obligations. Understanding these terms can help franchisees avoid unexpected costs associated with early termination.