Does the Caring Transitions agreement specify if the liquidated damages payment is in addition to other remedies?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties agree that the full extent of the damages that Franchisor will incur if a Covenantor fails to comply with their obligations under section 3 or 4 is difficult to ascertain, but the parties nevertheless desire certainty in this matter.
Accordingly, if a Covenantor breaches or fails to comply with any of the provisions of section 3 or 4, they shall pay Franchisor, as liquidated damages and not as a penalty, a royalty equal to 15% of the gross amount of all income, sales, salary, wages, fees, dividends, distributions, and other compensation received or earned by Covenantor or any Covered Person, or to which any of those parties becomes entitled, as the result of the breach or noncompliance.
The parties further agree that the royalty required by this paragraph is reasonable in light of the damages that Franchisor will incur.
This payment is not exclusive of any other remedies that Franchisor may have, including equitable remedies, attorneys' fees, and costs.
Source: Item 23 — RECEIPT (FDD pages 49–202)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, the liquidated damages payment is not the only recourse Caring Transitions has if a franchisee fails to meet their obligations. Specifically, if a Covenantor (which includes the franchisee) breaches the agreement, they must pay Caring Transitions a royalty equal to 15% of the gross amount of all income they received because of the breach.
This payment is considered liquidated damages, intended to compensate Caring Transitions for the difficulty in ascertaining the full extent of damages caused by the breach. However, the agreement explicitly states that this payment is not the exclusive remedy available to Caring Transitions.
Caring Transitions retains the right to pursue other remedies, including equitable relief, attorney's fees, and costs. This means that in addition to receiving the 15% royalty as liquidated damages, Caring Transitions can also seek court orders to enforce the agreement, recover legal expenses, and pursue any other legal avenues available to them.