Under what circumstances am I required to pay liquidated damages to Card My Yard?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
sidiaries, shareholders, officers, directors, employees, agents, successors and assigns.
- (5) We may assign our options under this Section XIX.B.to any person or entity without your consent.
- C. Liquidated Damages/Unauthorized Closure Fee. Upon any unauthorized closure of the Card My Yard business by you or any termination of this Agreement in connection with a breach by you, you will be required to promptly pay us liquidated damages in an amount equal to the greater of (a) $6,600 or (b) the total royalties paid by you under this Agreement during the previous 12 months multiplied by two (or if your Card My Yard business has not been open for at least 12 months then your liquidated damages amount will be $6,600). Such amount shall be due and payable to us in one lump sum payment promptly upon our written request. Such liquidated damages are in addition to, and not in lieu of, any other remedies available to us under this Agreement and shall be due and payable
to us regardless of whether we terminate this Agreement or take other remedial actions.
D. Liquidated Damages/Non-Reporting or Under-Reporting Fee. An amount equal to $5,000 per occurrence will be owed for each instance when we document your intentional non-reporting or under-reporting
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, franchisees may be required to pay liquidated damages under specific circumstances related to unauthorized closures, breaches of the franchise agreement, or intentional misreporting of revenue.
Specifically, if a franchisee closes their Card My Yard business without authorization or if the agreement is terminated due to the franchisee's breach, the franchisee must pay liquidated damages. The amount will be the greater of $6,600 or two times the total royalties paid by the franchisee in the previous 12 months. If the business has been open for less than 12 months, the liquidated damages will be $6,600. This payment is due in a lump sum upon written request from Card My Yard and is in addition to any other remedies Card My Yard may pursue.
Additionally, Card My Yard franchisees will owe $5,000 per instance for each documented case of intentionally not reporting or under-reporting revenues. In such cases, Card My Yard has the right to terminate the franchise agreement without allowing the franchisee an opportunity to correct the issue. These liquidated damages serve to compensate Card My Yard for losses resulting from the franchisee's actions and to ensure compliance with the franchise agreement.
Prospective franchisees should carefully consider these potential liabilities and ensure they understand the terms and conditions under which liquidated damages may be assessed. It is important to maintain accurate records, adhere to the franchise agreement, and communicate openly with Card My Yard to avoid these penalties.