Under the Casiola Franchise Agreement, is the franchisee personally liable for all fees, payments, 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 the 2024 Casiola Franchise Disclosure Document, both the franchisee and their owners can be held jointly and severally liable for all payments, fees, and monetary obligations owed to Casiola. This includes royalty fees, advertising contributions, and any other fees or charges due under the Franchise Agreement, ancillary agreements, or any other agreements between the franchisee and Casiola.
Specifically, in the event of a breach of the Franchise Agreement leading to termination, Casiola has the right to hold the franchisee and their owners liable for all outstanding payments and financial obligations. This extends to lost revenues, profits, and fees that Casiola would have received throughout the term of the agreement had the breach not occurred. Casiola may calculate these damages using the franchisee's most recent calendar year gross sales or, if the business has been open for less than a year, by using the average gross sales of Casiola businesses across the system.
This clause ensures that Casiola can recover all amounts owed and be compensated for future losses resulting from a franchisee's breach. The franchisee should be aware that this provision makes them and their owners personally responsible for the financial performance of the franchise and any failures to meet the financial obligations outlined in the Franchise Agreement.