Is Bft prevented from claiming expectation or consequential damages, including lost future royalties, if the agreement is terminated due to the Developer's default?

According to Bft's 2025 Franchise Disclosure Document, Bft is not prevented from claiming expectation or consequential damages, including lost future royalties, if the agreement is terminated due to the Developer's default. The agreement explicitly states that nothing within it should be interpreted to prevent Bft from claiming and obtaining these damages. This includes lost future royalties for the remaining term of the agreement if termination occurs because of the Developer's default. The parties involved acknowledge that Bft has the right to claim these damages under the agreement.

This clause is significant for prospective Bft developers as it outlines the potential financial liabilities they could face if they default on the agreement, leading to termination. Expectation damages generally aim to put the franchisor in the position they would have been in had the agreement been fulfilled, while consequential damages cover indirect losses resulting from the breach. Lost future royalties, in particular, can be a substantial amount, representing the income Bft expected to receive over the remaining term of the agreement.

It is important for potential Bft developers to fully understand the implications of this clause and to assess their ability to meet the obligations of the agreement. Developers should consider seeking legal counsel to review the agreement and clarify any questions or concerns regarding potential liabilities upon default and termination. This proactive approach can help mitigate risks and ensure a clear understanding of the financial responsibilities associated with the Bft franchise.