Under what conditions are liquidated damages payable by a Crave Cookies franchisee?

Question

Accepted Answer

| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Royalty | 6% of your gross sales | Twice monthly, on the 1st and the 16th | See Note 1 and Note 2. |
| Marketing Fund Contribution | 2% of your gross sales maximum allowed by law, then the maximum allowed by law) | Twice monthly, on the 1st and the 16th | See Item 11 for a detailed discussion about these funds. Amounts due will be withdrawn by electronic wire transfer from your designated bank account. because of insufficient funds in your account. |
| Costs of collection | Our actual costs | As incurred | Payable if we incur costs (including reasonable attorney fees) in attempting to collect amounts you owe to us. |
| Special support fee | Our then-current fee (currently, $600 per day), plus our expenses. | On demand | If we provide in-person support to you in response to your request, we may charge this fee plus any out-of-pocket expenses (such as travel, lodging, and meals for employees providing onsite support). |
| Customer complaint resolution | Our expenses |  | We may take any action we deem appropriate to resolve a customer complaint about your business. If we respond to a customer complaint, we may require you to reimburse us for our expenses. |
| Records audit | Our actual cost | On demand | Payable only if (1) we audit you because you have failed to submit required reports or other non-compliance, or (2) the audit concludes that you under-reported gross sales by more than 3% for any 4-week period. |
| Special inspection fee | Currently $600, plus our out-of-pocket costs | On demand | Payable only if we conduct an inspection of your business because of a governmental report, customer complaint or other customer feedback, or your default or non-compliance with any system specification. |
| System non-compliance fines and charges | Amount to be specified in the Crave Operations Manual. Currently ranges between $50 and $2,000. | As incurred | To be paid in accordance with our electronic funds transfer or automatic withdraw program. Payable upon demand if you fail to correct deficiencies or non-compliance with our system. |
| Non-compliance, violation and fees | Amounts range from $0 if infractions cured to maximum fines of $5000. | When notified | See Exhibit L for specific violations and cures. Exhibit L will also be included in the Franchise Agreement as Attachment 4. |
| Transfer fee | $10,000 plus any broker fees and other y more than 3% for any 4-week | When transfer occurs | Payable if you sell your business. |
| period | out-of-pocket costs we incur |  | The $10,000 fee does not apply in the State of Washington but we are still entitled to broker fees and other out-of-pocket costs we incur. |
| Liquidated damages | An amount equal to royalty fees and marketing fund contributions for the lesser of (i) 2 years or (ii) the remaining weeks of the franchise term. | On demand | Payable if we terminate your franchise agreement because of your default, or if you terminate the franchise agreement without the right to do so. |

Source: Item 6 — OTHER FEES (FDD pages 11–15)

Under what conditions are liquidated damages payable by a Crave Cookies franchisee?

Answer from 2025 FDD Document

What This Means (2025 FDD)

Type of Fee	Amount	Due Date	Remarks
Royalty	6% of your gross sales	Twice monthly, on the 1st and the 16th	See Note 1 and Note 2.
Marketing Fund Contribution	2% of your gross sales maximum allowed by law, then the maximum allowed by law)	Twice monthly, on the 1st and the 16th	See Item 11 for a detailed discussion about these funds. Amounts due will be withdrawn by electronic wire transfer from your designated bank account. because of insufficient funds in your account.
Costs of collection	Our actual costs	As incurred	Payable if we incur costs (including reasonable attorney fees) in attempting to collect amounts you owe to us.
Special support fee	Our then-current fee (currently, $600 per day), plus our expenses.	On demand	If we provide in-person support to you in response to your request, we may charge this fee plus any out-of-pocket expenses (such as travel, lodging, and meals for employees providing onsite support).
Customer complaint resolution	Our expenses		We may take any action we deem appropriate to resolve a customer complaint about your business. If we respond to a customer complaint, we may require you to reimburse us for our expenses.
Records audit	Our actual cost	On demand	Payable only if (1) we audit you because you have failed to submit required reports or other non-compliance, or (2) the audit concludes that you under-reported gross sales by more than 3% for any 4-week period.
Special inspection fee	Currently $600, plus our out-of-pocket costs	On demand	Payable only if we conduct an inspection of your business because of a governmental report, customer complaint or other customer feedback, or your default or non-compliance with any system specification.
System non-compliance fines and charges	Amount to be specified in the Crave Operations Manual. Currently ranges between $50 and $2,000.	As incurred	To be paid in accordance with our electronic funds transfer or automatic withdraw program. Payable upon demand if you fail to correct deficiencies or non-compliance with our system.
Non-compliance, violation and fees	Amounts range from $0 if infractions cured to maximum fines of $5000.	When notified	See Exhibit L for specific violations and cures. Exhibit L will also be included in the Franchise Agreement as Attachment 4.
Transfer fee	$10,000 plus any broker fees and other y more than 3% for any 4-week	When transfer occurs	Payable if you sell your business.
period	out-of-pocket costs we incur		The $10,000 fee does not apply in the State of Washington but we are still entitled to broker fees and other out-of-pocket costs we incur.
Liquidated damages	An amount equal to royalty fees and marketing fund contributions for the lesser of (i) 2 years or (ii) the remaining weeks of the franchise term.	On demand	Payable if we terminate your franchise agreement because of your default, or if you terminate the franchise agreement without the right to do so.