What is the maximum amount of liquidated damages that Bigfoot Forestry can impose?
Bigfoot_Forestry Franchise · 2025 FDDAnswer from 2025 FDD Document
- Liquidated Damages: You must pay us liquidated damages if: (a) we terminate the Franchise Agreement due to your default; or (b) you terminate the Franchise Agreement prior to its expiration date (except in accordance with the provisions governing your right to terminate following our uncured breach). Liquidated damages are calculated as the sum of average monthly royalty fees and brand fund fees imposed during the 12-month period preceding termination (or your entire period of operation if less than 12-months) multiplied by the lesser of: (a) 24 (representing 2 years' of fees); or (b) the total number of months remaining under the term. If you pay us liquidated damages in a timely manner, we may not pursue a claim against you for lost profits (but we may still seek other damages we incur due to your breach).
Source: Item 6 — OTHER FEES (FDD pages 12–15)
What This Means (2025 FDD)
According to the 2025 Bigfoot Forestry Franchise Disclosure Document, the liquidated damages that Bigfoot Forestry can impose are calculated based on the average monthly royalty and brand fund fees. If the Franchise Agreement is terminated either due to the franchisee's default or the franchisee terminating the agreement before its expiration (except in specific breach scenarios), liquidated damages will be assessed.
The calculation involves summing the average monthly royalty fees and brand fund fees from the 12 months preceding termination. If the franchise operated for less than 12 months, the average is calculated over the entire operating period. This sum is then multiplied by the lesser of two figures: 24 (representing two years' worth of fees) or the total number of months remaining under the franchise term.
For a prospective Bigfoot Forestry franchisee, this means that the maximum liquidated damages are capped at the equivalent of 24 months of average royalty and brand fund fees. However, the actual amount could be lower if the remaining term of the franchise agreement is less than 24 months. It is important to note that if liquidated damages are paid in a timely manner, Bigfoot Forestry will not pursue claims for lost profits, though they may still seek other damages resulting from the breach. This provides some certainty regarding the financial exposure in the event of early termination, but franchisees should carefully consider the potential impact of these damages on their financial situation.