Under what circumstances will Bigfoot Forestry impose 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, liquidated damages may be imposed under specific circumstances related to the termination of the Franchise Agreement. Bigfoot Forestry will require the franchisee to pay liquidated damages if Bigfoot Forestry terminates the Franchise Agreement due to the franchisee's default. Additionally, liquidated damages are due if the franchisee terminates the Franchise Agreement before its expiration date, unless the franchisee is terminating due to Bigfoot Forestry's uncured breach of contract.
The liquidated damages are calculated based on the average monthly royalty fees and brand fund fees. This average is taken from the 12-month period preceding the termination. If the franchise has been operating for less than 12 months, the average is calculated over the entire period of operation. This average monthly fee is then multiplied by a factor. The factor is the lesser of 24, representing two years' worth of fees, or the total number of months remaining under the franchise term.
The FDD specifies that if the franchisee pays the liquidated damages in a timely manner, Bigfoot Forestry will not pursue a claim for lost profits. However, Bigfoot Forestry retains the right to seek other damages incurred due to the franchisee's breach of the agreement. This clause provides some certainty regarding the financial consequences of early termination or default, but franchisees should be aware that additional damages beyond the liquidated amount could still be claimed by Bigfoot Forestry.