Does the Caring Transitions agreement specify that the liquidated damages payment is not exclusive of any 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 specified in the agreement is not the only recourse available to the franchisor. If a franchisee (or "Covenantor") breaches sections 3 or 4 of the agreement, Caring Transitions is entitled to a royalty payment equal to 15% of the gross amount of all income, sales, wages, fees, dividends, distributions, and other compensation received or earned by the franchisee or any person affiliated with them as a result of the breach.
However, the agreement explicitly states that this payment does not prevent Caring Transitions from pursuing other remedies. These additional remedies can include equitable relief, such as an injunction, as well as the recovery of attorney's fees and costs associated with enforcing the agreement.
This provision means that Caring Transitions has multiple avenues for recourse if a franchisee violates the agreement. While the 15% royalty payment serves as a form of liquidated damages, it does not limit the franchisor's ability to seek further compensation or legal remedies for the breach. This could significantly increase the financial burden on a franchisee who fails to comply with the terms of the agreement, as they could be liable for not only the royalty payment but also additional damages and legal expenses.