Are liquidated damages the only damages Caring Transitions can pursue from a franchisee after early termination?
Caring_Transitions Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 41–49)
What This Means (2025 FDD)
According to Caring Transitions' 2025 Franchise Disclosure Document, liquidated damages are not the only damages they can pursue from a franchisee after early termination. While the franchisee's payment of liquidated damages covers the Brand Damages resulting from early termination, it does not cover other amounts due to Caring Transitions under the agreement as of the termination date.
Caring Transitions specifies that liquidated damages are in addition to, and not in lieu of, the franchisee's obligation to pay other amounts owed under the agreement and to comply with post-termination provisions. The agreement also states that the liquidated damages provision does not cover any other damages to which Caring Transitions might be entitled due to the franchisee's actions or inaction.
Furthermore, if a franchisee fails to address any breach of the agreement within the specified timeframe, they are liable to pay Caring Transitions for all damages, costs, and expenses incurred as a result of the breach. This includes reasonable attorney and accounting fees, regardless of whether Caring Transitions chooses to terminate the agreement. Therefore, a prospective franchisee should be aware that early termination can result in multiple financial liabilities beyond just the liquidated damages.