What is Casiola permitted to do if the franchisee breaches this agreement?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
ities, narrowing the definition of a Competitive Business, shortening the duration of the Post-Term Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon Franchisee under this Article 6 to ensure that the terms and covenants are enforceable under applicable law.
6.G. BREACH OF RESTRICTIVE COVENANTS AND OBLIGATIONS
Franchisee agrees that Franchisee's failure and/or Franchisee's Owner(s) failure to comply with the restrictive covenants and obligations set forth in this Article 6 will cause irreparable harm to Franchisor and/or other Casiola Business franchisees for which there is no adequate remedy at law. Franchisee agrees that any violation of these Article 6 covenants and obligations by either Franchisee and/or any Owner(s) will entitle Franchisor to injunctive relief. Franchisee agrees that Franchisor may apply for such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of Franchisee, in the event of the entry of such injunction, will be the dissolution of such injunction, if warranted, upon a hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the Franchisee and Franchisor agree that the amount of the bond shall not exceed $1,000. Franchisor's remedies under this Article 6.G. are not exclusive of any other, but may be combined with others under this Agreement, or at law or in equity, including injunctive relief, specific performance and recovery of monetary damages.
6.H. OWNERSHIP OF INNOVATIONS, IMPROVEMENTS AND CUSTOMER INFORMATION
Franchisee agrees that with regard to the Franchised Business all customer lists and their contents and information represent Confidential Information and constitute an asset of Franchisor whether or not such information was supplied by Franchisor. During the Term of this Agreement and in connection with the development, establishment, marketing, promotion and operation of the Franchised Business, Franchisee shall disclose to Franchisor all of Franchisee's ideas, concepts, methods and products conceived or developed by Franchisee and Franchisee's affiliates, Owners, agents, and employees relating to the development and operation of Casiola Businesses. Franchisee hereby assigns to Franchisor and Franchisee agrees to procure from Franchisee's Owners, affiliates and employees' assignment of any such ideas, concepts, methods, and products that Franchisee is required to disclose to Franchisor under this Article 6.H. Franchisor shall have no obligation to make any lump sum or on-going payments to Franchisee or Franchisee's Owners, affiliates or employees with respect to any such idea, concept, method, technique or product. Franchisee agrees that Franchisee will not use nor will Franchisee allow any other person or entity to use any such concept, method or product without obtaining Franchisor's prior written approval.
ARTICLE 7 OPERATING STANDARDS
7.A. OPERATING REQUIREMENTS
At all times, Franchisee and the Franchised Business shall, as designated by Franchisor in the Operations Manual and/or as otherwise designated by Franchisor in writing and, as may be modified by Franchisor from time to time: (a) exclusively offer and sell the Approved Services and Products; (b) exclusively purchase, lease, license, and use the System Supplies; (c) maintain a complete and updated inventory and supply of System Supplies; (d) maintain, update, replenish and replace Franchisee's System Supplies; (e) maintain, update, replenish and recondition Franchisee's Administrative Office; (f) Exclusively license and use Franchisor's designated Bookings and Management Systems; (g) meet Franchisor's standards, specifications, and approval process for Ancillary Third Party Service Providers;
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, if a franchisee fails to comply with the restrictive covenants and obligations outlined in Article 6, Casiola is entitled to seek injunctive relief to prevent further harm. Casiola can pursue this injunctive relief without posting a bond, provided they give due notice. If a court requires a bond, the franchisee and Casiola agree that the bond amount will not exceed $1,000.
Casiola's remedies for a breach are not limited to injunctive relief. They can combine these remedies with others available under the agreement, at law, or in equity. These include seeking specific performance, which compels the franchisee to fulfill the terms of the agreement, and recovering monetary damages to compensate for losses suffered due to the breach.
Additionally, Casiola has the right to void and terminate the franchise agreement. Following termination, Casiola can market, sell, transfer, convey, and assign the rights granted to the franchisee to another party at their discretion, without providing compensation to the breaching franchisee. Casiola can also hold the franchisee and their owners liable for all outstanding payments, fees, monetary obligations, and interest owed to Casiola under the agreement and any ancillary agreements. This includes accelerating all payments, making them immediately due.
Furthermore, Casiola can hold the franchisee and their owners liable for lost revenues, profits, and fees that Casiola would have received had the breach not occurred and the agreement not been terminated. To calculate these damages, Casiola can use the franchisee's most recent calendar year gross sales, assuming those sales would have continued throughout the remainder of the agreement's term. If the franchise 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 estimate lost revenues. The franchisee agrees that this method of calculating damages is fair and reasonable, considering it a form of liquidated damages.