Under what circumstances must a Bigfoot Forestry franchisee pay liquidated damages?
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 Bigfoot Forestry's 2025 Franchise Disclosure Document, a franchisee must pay liquidated damages under specific circumstances related to the termination of the Franchise Agreement.
A Bigfoot Forestry franchisee is obligated to pay liquidated damages if (a) Bigfoot Forestry terminates the Franchise Agreement due to the franchisee's default, or (b) the franchisee terminates the Franchise Agreement before its expiration date, unless the termination is in accordance with the provisions allowing the franchisee to terminate following Bigfoot Forestry's uncured breach.
The liquidated damages are calculated by summing the average monthly royalty fees and brand fund fees imposed during the 12-month period preceding the termination. If the franchisee operated for less than 12 months, the calculation uses the entire period of operation. This sum is then multiplied by the lesser of (a) 24, representing two years' worth of fees, or (b) the total number of months remaining under the term of the Franchise Agreement.
The FDD specifies that if the franchisee pays the liquidated damages in a timely manner, Bigfoot Forestry may not pursue a claim against the franchisee for lost profits. However, Bigfoot Forestry retains the right to seek other damages incurred due to the franchisee's breach of contract. This provision aims to compensate Bigfoot Forestry for the early termination of the agreement while limiting the potential for further claims related to lost profits, provided the franchisee fulfills the liquidated damages obligation.