Within how many days after termination of the Carvel franchise agreement must liquidated damages be paid?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
You will pay all amounts stated in this Section 18.3 within 30 days after the termination of this Agreement.
You agree, and you direct any party construing this Agreement to conclusively presume, that the damages stated in this Section 18.3: (i) are true liquidated damages; (ii) are intended to compensate us for the harm we will suffer; (iii) are not a penalty; (iv) are a reasonable estimate of our probable loss resulting from your defaults, viewed as of the termination date; and (v) will be in addition to all other rights we have to obtain legal or equitable relief.
We have the right to set off any credits, balances or amounts we owe to you against the amounts you owe under this Section 18.3.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, if the franchise agreement is terminated, the franchisee is required to pay all liquidated damages within 30 days of the termination date. These damages are intended to compensate Carvel for the harm suffered due to the termination and are not considered a penalty.
Carvel retains the right to offset any credits, balances, or amounts owed to the franchisee against the liquidated damages owed by the franchisee. This means that if Carvel owes the franchisee any money, they can deduct that amount from the liquidated damages the franchisee is required to pay.
This requirement ensures that Carvel is promptly compensated for losses resulting from early termination of the franchise agreement. Prospective franchisees should be aware of this obligation and factor it into their financial planning, as failure to pay within the specified timeframe could lead to further legal action or penalties.