Are Casiola Franchisee's Owners liable for payments, fees, and monetary obligations?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
- (2) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, all payments, fees, monetary obligations, financial obligations, interest, and charges due and owing to Franchisor from Franchisee pursuant to this Agreement, the Ancillary Agreements, and/or any other agreements between Franchisee and Franchisor, including, without limitation, Royalty Fees and Advertising Contributions with each and every payment and obligation to be accelerated and due immediately.
- (3) To hold Franchisee and Franchisee's Owners liable for, and recover from each of them, jointly and severally, lost revenues, profits, and fees including, but not limited to Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees, revenues and/or expenses that would have been paid to Franchisor, under the terms of this Agreement and throughout the Term of this Agreement, had a breach not occurred and had Franchisor not terminated this Agreement. In calculating and determining the foregoing, Franchisee agrees that in calculating and in determining such damages that it is fair and reasonable to use Franchisee's most recent calendar year Gross Sales in calculating and determining Franchisor lost revenues and fees and by assuming that such Gross Sales would have been earned in each and every year throughout the remainder of the Term had this Agreement not been terminated. If, however, the Franchised Business has been open and in operation for less than one calendar year, Franchisee agrees that it is fair and reasonable to use an average of Casiola Business Gross Sales across the System during the year in which this Agreement was terminated and to use such average Gross Sales for the purpose of calculating and determining Franchisor lost revenues and fees and, in doing so, by assuming that such Gross Sales would have been earned in each and every year throughout the remainder of the Term had this Agreement not been terminated. Franchisee agrees that the foregoing is a form of liquidated damages, and that it is fair and reasonable.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, both the franchisee and their owners are liable for payments, fees, and monetary obligations to Casiola. Specifically, upon termination of the franchise agreement, Casiola has the right to hold the franchisee and their owners jointly and severally liable for all payments, fees, monetary obligations, financial obligations, interest, and charges due to Casiola. This includes, but is not limited to, Royalty Fees and Advertising Contributions, with all payments accelerated and due immediately.
Furthermore, Casiola can recover lost revenues, profits, and fees from the franchisee and owners, including Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and other fees that would have been paid throughout the term of the agreement had the breach not occurred. To calculate these damages, Casiola may use the franchisee's most recent calendar year Gross Sales, or if the business has been open for less than a year, the average Gross Sales across the Casiola system.
This clause ensures that Casiola can pursue all available avenues to recoup any financial losses resulting from a franchisee's breach or termination of the agreement. It also motivates the franchisee and their owners to adhere to the terms of the agreement to avoid potential financial repercussions. Franchisees and owners are not entitled to withhold payments due to Casiola under any circumstances, even if they claim non-performance by Casiola.