How is the amount of Liquidated Damages calculated for an Ella Cafe franchise?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee1 | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages4 | An amount equal to average royalty fees plus brand marketing fees owed by you for a period of 52 weeks multiplied by the lesser of (i) twenty four months 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 10–15)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, liquidated damages are calculated if the franchise agreement is terminated due to the franchisee's default or if the franchisee terminates the agreement without proper cause. The liquidated damages are determined by multiplying two factors.
The first factor is the average of the royalty fees plus brand marketing fees that the franchisee owed to Ella Cafe over the 52-week period preceding the termination date. If the franchisee operated the business for less than 52 weeks, the average is calculated based on the period they were in operation.
The second factor is the lesser of either 24 months (two years) or the number of weeks remaining in the franchise term. This amount is payable on demand.