Besides liquidated damages, what other payments is a defaulting Caring Transitions franchisee responsible for upon termination?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
continue for the full length of the Initial Term due to Franchisee's default. Franchisee acknowledges that its payment of liquidated damages is full compensation to Franchisor only for the Brand Damages resulting from the early termination of this agreement and is in addition to, and not in lieu of, Franchisee's obligations to pay other amounts due Franchisor under this agreement as of the effective date of the termination, and to comply strictly with the Post-Termination Provisions. Franchisee further acknowledge that this liquidated damages provision does not cover any other damages to which Franchisor might be entitled as a result of Franchisee's actions or inaction.
- 13.6 Liability for Breach. If Franchisee fails to cure any breach within the applicable time period set forth in Section 13.2 above, Franchisee shall pay to Franchisor all damages, costs and expenses incurred by Franchisor as a result of any such breach, including, but not limited to, reasonable attorney and accounting fees. This provision shall apply regardless of whether or not Franchisor exercises its right to terminate this Agreement.
ARTICLE 14
OBLIGATIONS UPON TERMINATION
- 14.1 Franchisee's Obligations. Upon the termination or expiration of this agreement for any reason, Franchisee shall forthwith:
- (a) Cease to operate the franchised business and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former franchisee of Franchisor.
- (b) Except as may be authorized under another franchise agreement in effect between Franchisee and Franchisor, Franchisee shall immediately and permanently cease all use of the Marks and any derivative or confusingly similar variation thereof. Without limiting the generality of the preceding sentence, Franchisee's obligations under this paragraph include permanently discontinuing all Internet advertising (including, by way of example, Facebook, LinkedIn, Twitter, Service Magic, Google, and pay-per-click programs) containing any of the Marks or any derivative or confusingly similar variation thereof.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, a franchisee may be responsible for additional payments beyond liquidated damages upon termination. Specifically, the franchisee must pay all other amounts due to Caring Transitions under the agreement as of the termination date, and strictly comply with post-termination provisions.
If a franchisee fails to correct a breach of the agreement, they are liable to Caring Transitions for all damages, costs, and expenses incurred by Caring Transitions as a result of the breach. This includes reasonable attorney and accounting fees, regardless of whether Caring Transitions chooses to terminate the agreement.
Additionally, if Caring Transitions takes over the operation of the franchised business due to the franchisee's default, the franchisee must pay Caring Transitions a management fee of $500 per day. The franchisee must also reimburse Caring Transitions for all reasonable expenses incurred while operating the business. These expenses include personnel costs for supervising and staffing, as well as their travel, food, and lodging. The franchisee is also required to indemnify and defend Caring Transitions against any claims arising from the operation of the business, except those resulting from gross negligence or willful misconduct by Caring Transitions' employees.