What triggers the Liquidated Damages payment for a Best Brains franchisee?
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 Best Brains's 2025 Franchise Disclosure Document, a franchisee may be required to pay liquidated damages of $30,000 under specific circumstances related to the termination of the franchise agreement.
The liquidated damages payment is triggered if the franchisee terminates the franchise agreement in a way that does not comply with Section 7.A of the agreement. Additionally, Best Brains can also trigger this payment if they terminate the franchise agreement according to the terms outlined in Section 7.B. In either of these termination scenarios, the franchisee is obligated to pay Best Brains $30,000 as liquidated damages by the effective date of the termination.
This clause is a significant consideration for potential Best Brains franchisees. It means that prematurely or improperly terminating the franchise agreement can result in a substantial financial penalty. Franchisees should carefully review Sections 7.A and 7.B of the franchise agreement to fully understand the conditions under which they might be liable for these liquidated damages.
The FDD indicates that the liquidated damages are "as incurred" and are detailed in FA Sec. 7(H). This means the payment is due immediately upon the triggering event (termination). It is important for prospective franchisees to seek legal counsel to fully understand the implications of these termination clauses and the potential financial risks involved.