Does the liquidated damages payment for Chocolate Fish Coffee cover all potential monetary damages?
Chocolate_Fish_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee's payment to Chocolate Fish Franchising under this Section will be in lieu of any direct monetary damages that Chocolate Fish Franchising may incur as a result of Chocolate Fish Franchising's loss of Royalty Fees and Brand Fund Contributions that would have been owed to Chocolate Fish Franchising after the date of termination; however, such payment shall be in addition to all damages and other amounts arising under Section 14.3 and Section 14.4, Chocolate Fish Franchising's right to injunctive relief for enforcement of Article 13, and any attorneys' fees and other costs and expenses to which Chocolate Fish Franchising is entitled under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 41–119)
What This Means (2024 FDD)
According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, the liquidated damages payment does not cover all potential monetary damages. The document specifies that the payment is intended to cover the loss of Royalty Fees and Brand Fund Contributions that Chocolate Fish Coffee would have received after the termination date.
However, this payment is in addition to other damages and amounts arising under Sections 14.3 and 14.4 of the agreement. It also does not include Chocolate Fish Coffee's right to injunctive relief for enforcement of Article 13, or any attorneys' fees and other costs and expenses that Chocolate Fish Coffee is entitled to under the agreement.
In practical terms, this means that if a franchisee defaults and Chocolate Fish Coffee terminates the agreement, the franchisee will owe a liquidated damages payment calculated based on past Royalty Fees and Brand Fund Contributions. However, the franchisee may also be liable for additional damages, legal fees, and other costs, depending on the specific circumstances of the termination and the provisions of the franchise agreement.