factual

Can Casiola hold the franchisee and their owners liable for damages resulting from a breach of the franchise agreement?

Casiola Franchise · 2024 FDD

Answer 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.

  • (4) To hold Franchisee and Franchisee's Owners liable for all costs, fees, expenses, and/or damages incurred by Franchisor and/or suffered by Franchisor as a result of a breach or termination including, but not limited to, the recovery of reasonable attorney fees and expenses including court costs, arbitration fees, mediation fees, arbitrator fees, mediator fees, depositions and other related expenses.
  • (5) To enjoin, restrain, and otherwise prohibit Franchisee from operating the Franchised Business or exercising any rights granted to Franchisee under this Agreement pursuant to a court order restraining order, injunction or other means.

Source: Item 23 — RECEIPTS (FDD pages 47–209)

What This Means (2024 FDD)

According to Casiola's 2024 Franchise Disclosure Document, Casiola can hold both the franchisee and their owners liable for damages resulting from a breach of the franchise agreement. Casiola has the right to recover all payments, fees, monetary obligations, financial obligations, interest, and charges due, including Royalty Fees and Advertising Contributions. All payments and obligations will be accelerated and due immediately.

In the event of a breach, Casiola can also recover lost revenues, profits, and fees, including Royalty Fees, Brand Development Fund Fee, Advertising Contributions, and all other fees and expenses 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, assuming those sales would have continued each year for the remainder of the agreement's term. If the business has been open for less than a year, Casiola can use the average Gross Sales of Casiola businesses across the system during the year of termination to project lost revenues. This calculation is considered a form of liquidated damages.

Furthermore, Casiola can recover all costs, fees, expenses, and damages incurred as a result of a breach or termination, including reasonable attorney fees, court costs, arbitration fees, mediation fees, arbitrator fees, mediator fees, depositions, and other related expenses. Casiola also has the right to seek injunctive relief to prevent the franchisee from operating the Franchised Business or exercising any rights granted under the agreement. These remedies are in addition to any other rights available to Casiola under the agreement or by law.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.