When are liquidated damages payable to Canine Dimensions?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
| Name of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages | See Note 5 | Upon Demand | Payable only if we terminate the Franchise Agreement with cause, or if you cancel your Franchise Agreement prior to its expiration. |
- If we terminate the Franchise Agreement with cause, you must pay us liquidated damages in the amount of the monthly average of the Royalty Fees that were due and owing to us during the 12-month period immediately preceding termination (or, if you did not operate the Franchised Business for at least
12 months prior to termination, $700), multiplied by the lesser of: (a) 36; or (b) if less than 36 months remain in the Term, the number of months remaining in the Term, except under no circumstances will the liquidated damages be less than $20,000.
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, liquidated damages are payable upon demand if Canine Dimensions terminates the Franchise Agreement with cause, or if the franchisee cancels the Franchise Agreement prior to its expiration.
Liquidated damages are designed to compensate Canine Dimensions for losses resulting from early termination. The amount of liquidated damages is detailed in Item 6 of the FDD. If Canine Dimensions terminates the agreement with cause, the franchisee must pay liquidated damages. The amount is calculated based on the monthly average of Royalty Fees due during the 12 months before termination, or $700 if the franchise operated for less than 12 months. This average is then multiplied by either 36 or the number of months remaining in the term, whichever is less. However, the liquidated damages will not be less than $20,000 under any circumstances.
This provision means that a franchisee who breaches the agreement and causes Canine Dimensions to terminate it could face significant financial penalties. Even if the remaining term is short, the minimum liquidated damages are $20,000. Franchisees should be aware of the conditions under which Canine Dimensions can terminate the agreement with cause, as outlined in the FDD, to avoid triggering this clause. Franchisees should carefully consider the implications of early termination, as they will be responsible for paying liquidated damages to Canine Dimensions.