Are the rights and remedies of the parties to the Cilantro Taco Grill agreement cumulative or alternative?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that a precise calculation of the full extent of the damages Franchisor will incur in the event of termination of this Agreement as a result of Franchisee's default is difficult to determine and that this lump sum payment is reasonable in light thereof.
The liquidated damages payable by Franchisee pursuant to this Section 18.1.8 shall be in addition to all other amounts payable under this Agreement and shall not affect Franchisor's right to obtain appropriate injunctive relief and remedies pursuant to any other provision of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill FDD, the remedies available to Cilantro Taco Grill in the event of a franchisee default are cumulative. This means that Cilantro Taco Grill is entitled to pursue all available legal and equitable remedies, rather than being limited to a single course of action.
Specifically, the FDD states that the liquidated damages payable by the franchisee are in addition to all other amounts payable under the agreement. This indicates that Cilantro Taco Grill can pursue both liquidated damages and any other financial obligations the franchisee owes. Furthermore, the FDD explicitly states that the right to obtain injunctive relief and other remedies is not affected by the liquidated damages provision.
For a prospective Cilantro Taco Grill franchisee, this means that defaulting on the franchise agreement could result in multiple financial and legal repercussions. Cilantro Taco Grill can pursue various avenues to recover losses and enforce the agreement, increasing the potential financial burden on the franchisee in case of default. This is a standard practice in franchising, as franchisors aim to protect their brand and system-wide interests.