What payments are due to Crepe De Licious and its affiliates upon termination of the franchise agreement?
Crepe_De_Licious Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.7 Liquidated Damages. Upon the Franchisor's termination of this Agreement in accordance with Section 6 and the terms of this Agreement, the Area Developer shall pay to the Franchisor within 30 days of the date of the termination, as liquidated damages for the premature termination of this Agreement and not as a penalty, an amount equal to one-third (1/3) the Area Developer Fee payable to the Franchisor based this Agreement.
The Area Developer acknowledges and agrees that such liquidated damages are a reasonable approximation of the damages the Franchisor will incur resulting from the premature termination of this Agreement as a result of breach by the Area Developer, are appropriate because actual damages incurred by the Franchisor will be difficult or impossible to ascertain, are not a penalty, and shall not affect the Franchisor's right to, and are not in lieu of, any other payment or remedy, damages or relief to the Franchisor.
Source: Item 22 — CONTRACTS (FDD page 57)
What This Means (2025 FDD)
According to the 2025 Crepe De Licious Franchise Disclosure Document, if the Franchisor terminates the Area Developer Agreement, the Area Developer must pay liquidated damages. These damages are equal to one-third (1/3) of the Area Developer Fee that was initially payable to Crepe De Licious under the agreement. This payment must be made within 30 days of the termination date.
The FDD states that these liquidated damages are not a penalty but rather a reasonable estimate of the damages Crepe De Licious will incur due to the early termination caused by the Area Developer's breach. The document acknowledges that calculating the actual damages to Crepe De Licious would be difficult or impossible.
It is important to note that these liquidated damages do not prevent Crepe De Licious from pursuing any other payments, remedies, damages, or relief that they are entitled to. This means that in addition to the liquidated damages, Crepe De Licious may seek further compensation for any additional losses suffered as a result of the termination.