Are there any circumstances under which the liquidated damages calculation for Chocolate Fish Coffee might be amended?

According to the 2024 Franchise Disclosure Document, the standard liquidated damages calculation for Chocolate Fish Coffee can be amended under specific circumstances. The document states that the average Royalty Fees and Brand Fund Contributions used in the calculation will not be adjusted for any deferred or reduced fees outlined in an addendum to the Franchise Agreement. However, this provision can be overridden if the addendum specifically includes an amendment to the liquidated damages section (Section 14.5).

For a prospective Chocolate Fish Coffee franchisee, this means that any special financial arrangements, such as reduced royalty fees during an initial period, will not automatically lower the liquidated damages owed if the agreement is terminated early. The standard calculation, based on the average fees owed, will still apply unless the addendum explicitly states otherwise.

This clause protects Chocolate Fish Coffee by ensuring that franchisees cannot avoid the full liquidated damages amount based on temporary fee reductions. It also highlights the importance of carefully reviewing any addenda to the Franchise Agreement to understand how they might affect the liquidated damages calculation. Franchisees should pay close attention to whether any amendments to Section 14.5 are included in these addenda, as these changes could significantly impact their financial obligations upon termination.