What happens if liquidated damages are prohibited by applicable law for a Better Blend franchise?

According to Better Blend's 2024 Franchise Disclosure Document, if liquidated damages are prohibited by law or deemed unenforceable, a franchisee will be liable for Better Blend's actual damages. This includes, but is not limited to, lost future profits.

This means that instead of paying a predetermined amount as liquidated damages, a franchisee might have to cover the actual financial losses Better Blend incurs due to the franchisee's actions or termination of the agreement. These actual damages could potentially be higher or lower than the initially agreed-upon liquidated damages, depending on the specific circumstances and how a court assesses the losses.

For a prospective Better Blend franchisee, this clause introduces uncertainty. While liquidated damages offer a predictable cost in case of a breach or termination, being liable for actual damages means exposure to potentially larger and less predictable financial liabilities. It is important for a potential franchisee to fully understand the possible scope of 'actual damages' and how they would be calculated in their specific situation.