If Crave terminates my Franchise Agreement for cause, how soon must I pay liquidated damages?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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- If we terminate your Franchise Agreement for cause, you must pay us within 15 days after the effective date of termination liquidated damages equal to the average monthly Royalty Fees you paid or owed to us during the 12 months of operation preceding the effective date of termination multiplied by (a) 24 (being the number of months in two full years), or (b) the number of months remaining in the Agreement had it not been terminated, whichever is lower.
Source: Item 6 — OTHER FEES (FDD pages 12–19)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, if Crave terminates your Franchise Agreement for cause, you are required to pay liquidated damages within 15 days of the termination's effective date.
The liquidated damages will be calculated based on the average monthly Royalty Fees you paid or owed during the 12 months before the termination date. This average is then multiplied by either 24 (representing two full years) or the number of months remaining in the agreement had it not been terminated, whichever is lower.
This means a franchisee needs to be prepared to pay a potentially significant sum shortly after termination. The amount will depend on past royalty payments and the remaining term of the franchise agreement. Prospective franchisees should carefully consider this financial obligation and factor it into their business planning and risk assessment.