Under what condition does Buns On Fire charge liquidated damages?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
| Liquidated Damages | Varies | If we terminate the Franchise Agreement for cause | Liquidated Damages equal to the average monthly royalties that you paid us during the 12 months preceding termination multiplied by 24 or the number of months remaining in your franchise term, whichever is higher. |
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Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 16–19)
What This Means (2025 FDD)
According to Buns On Fire's 2025 Franchise Disclosure Document, liquidated damages may be charged if Buns On Fire terminates the Franchise Agreement for cause.
The liquidated damages are calculated based on the average monthly royalties paid by the franchisee during the 12 months preceding the termination. This average is then multiplied by 24 or the number of months remaining in the franchise term, whichever is higher.
This means that if Buns On Fire terminates the franchise agreement due to a franchisee's breach or failure to comply with the agreement's terms, the franchisee may owe a significant amount to Buns On Fire. The amount could be substantial, especially if the franchise was generating significant royalties or had a long remaining term. Prospective franchisees should carefully review the conditions under which Buns On Fire can terminate the agreement for cause to understand the potential financial implications.