Under what conditions is a Canine Dimensions franchisee required to pay liquidated damages?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
ITEM 7 ESTIMATED INITIAL INVESTMENT
YOUR ESTIMATED INITIAL INVESTMENT
| Investment | Amount- Range | Method of | When Payable | To Whom Payment is | ||
|---|---|---|---|---|---|---|
| Estimated | Payment | Made | ||||
| Initial Franchise Fee | $45,000 | Lump Sum (ACH) | Upon signing of the Franchise Agreement | Us | ||
| Training and Protected Territory Fee | $12,500 | Lump Sum (ACH) | Upon signing of the Franchise Agreement | Us | ||
| Travel and Living | $1,750 to $2,450 | As Incurred | As Arranged | Outside Suppliers | ||
| Expenses While Attending | ||||||
| Training | ||||||
| Inventory for resale | $5,000 | Lump Sum (ACH) | Prior to Opening | Us | ||
| Opening supply of marketing and training materials | $3,000 | Lump Sum (ACH) | Prior to Opening | Us | ||
| Advertising (Note 1) | $3,000 to $4,500 | Lump Sum (ACH) | As Agreed | Us | ||
| Training Equipment | $200 - $400 | As Incurred | As Agreed | Outside Suppliers | ||
| Computer and Office | $800 to $1,500 | As Incurred | As Agreed | Outside Suppliers | ||
| Equipment (Notes 2 and 3) | ||||||
| Memberships (Note 4) | $200 to $400 | As Incurred | As Arranged | Outside Suppliers | ||
| Insurance | $1,000 to $2,000 | As Incurred | As Agreed | Outside Suppliers | ||
| Additional Funds—(first | $1,000 to $3,000 | As Incurred | As Agreed | Outside Suppliers | ||
| three months) (Note 5) | ||||||
| TOTAL ESTIMATED INI |
Source: Item 6 — OTHER FEES (FDD pages 10–13)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, a franchisee may be required to pay liquidated damages under specific circumstances related to the termination of the Franchise Agreement. If Canine Dimensions terminates the Franchise Agreement with cause, the franchisee must pay liquidated damages. Additionally, liquidated damages are payable if the franchisee cancels the Franchise Agreement prior to its expiration.
The amount of liquidated damages is calculated based on the monthly average of Royalty Fees due to Canine Dimensions during the 12-month period immediately preceding termination. If the franchisee did not operate the Franchised Business for at least 12 months prior to termination, the monthly average is set at $700. This average is then multiplied by the lesser of 36 or the number of months remaining in the Term. However, the liquidated damages will not be less than $20,000 under any circumstances.
This provision means that a Canine Dimensions franchisee who breaches the agreement and causes termination, or who voluntarily terminates early, faces a significant financial penalty. The liquidated damages are designed to compensate Canine Dimensions for the anticipated loss of future royalties. Prospective franchisees should carefully consider the implications of this clause, as early termination can result in a substantial payment to Canine Dimensions, potentially reaching a minimum of $20,000 regardless of the business's operating history or remaining term length.