Instead of liquidated damages, under what circumstances might Bonchon seek actual damages from me?
Bonchon Franchise · 2025 FDDAnswer from 2025 FDD Document
Alternatively, should we, in fact, be capable of precisely ascertaining and quantifying the damages we have suffered and will suffer as result of your uncured default or the premature termination of this Agreement, then we may (in lieu of seeking Liquidated Damages) seek actual Damages as defined in Section 18.01(5) below.
Source: Item 23 — RECEIPTS (FDD pages 92–536)
What This Means (2025 FDD)
According to Bonchon's 2025 Franchise Disclosure Document, Bonchon has the option to seek actual damages instead of liquidated damages if they can precisely determine the amount of damages they have suffered due to a franchisee's uncured default or premature termination of the Franchise Agreement. This is contingent on Bonchon being able to accurately ascertain and quantify the damages.
This means that if a franchisee breaches the agreement and Bonchon terminates the agreement as a result, Bonchon can choose to pursue a claim for actual damages if they can provide evidence of the specific financial harm they experienced. This could include lost profits, costs associated with finding a replacement franchisee, or damage to the brand's reputation. The FDD specifies that Section 18.01(5) defines actual damages.
It is important to note that Bonchon is not obligated to seek liquidated damages. They have the discretion to choose the remedy that they believe will best compensate them for the harm caused by the franchisee's breach. As a prospective franchisee, it is crucial to understand the circumstances under which Bonchon might pursue actual damages and to assess the potential financial exposure in the event of a default or termination.