Does the liquidated damages payment to Better Blend cover all potential damages?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee's payment to BBF under this Section will be in lieu of any direct monetary damages that BBF may incur as a result of BBF's loss of Royalty Fees and Marketing Fund Contributions that would have been owed to BBF after the date of termination; however, such payment shall be in addition to all damages and other amounts arising under Section 14.3 and Section 14.4, BBF's right to injunctive relief for enforcement of Article 13, and any attorneys' fees and other costs and expenses to which BBF is entitled under this Agreement.
Except as provided in this Section, Franchisee's payment of this lump sum shall be in addition to any other right or remedy that BBF may have under this Agreement or otherwise.
If liquidated damages are prohibited by applicable law or are otherwise deemed unenforceable for any reason, then Franchisee shall be liable for BBF's actual damages (including, without limitation, lost future profits) instead of liquidated damages.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, the liquidated damages payment does not cover all potential damages. While the payment is intended to compensate Better Blend for the loss of Royalty Fees and Marketing Fund Contributions, it does not include all possible financial repercussions.
The franchisee may still be responsible for damages and other amounts arising under Section 14.3 and Section 14.4 of the Franchise Agreement, Better Blend's right to injunctive relief for enforcement of Article 13, and any attorneys' fees and other costs and expenses to which Better Blend is entitled under the agreement. The franchisee's payment of the lump sum for liquidated damages is in addition to any other right or remedy that Better Blend may have under the agreement or otherwise.
Furthermore, if liquidated damages are deemed unenforceable or prohibited by law, the franchisee may be liable for Better Blend's actual damages, including lost future profits, instead of the liquidated damages. This means that the franchisee could potentially owe a significantly larger amount if the actual damages exceed the predetermined liquidated damages amount. Prospective franchisees should carefully review Sections 14.3 and 14.4, Article 13, and consult with a legal professional to fully understand the scope of potential liabilities upon termination of the franchise agreement.