What fees must I pay to Face Foundrie upon termination or expiration of the franchise agreement?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
hisee not to acquire a successor franchise for the Facial Bar.
- 15.04 Expiration. Any successor franchise shall be conditioned upon the satisfaction of the conditions set forth above in this Section. Upon the expiration of the Term, any renewal term will be governed by the New Agreements. If Franchisee fails to meet any of the conditions set forth this section 15, the franchise granted to Franchisee hereunder shall automatically expire at the end of the Term.
16. EFFECT OF TERMINATION OR EXPIRATION.
16.01 Payment of Amounts Owed. Within ten (10) days after the effective date of termination or expiration (without Franchisee's successful exercise of the right to acquire a successor franchise) of this Agreement, Franchisee must pay Franchisor and its Affiliates all amounts owed thereto, including, without limitation, unpaid Royalty Fees, Marketing Contributions, Technology Fees, amounts owed for purchases from Franchisor or its Affiliates, and all other amounts due to Franchisor or its Affiliates and interest and late fees
due on any of the foregoing. In the event of termination for any default of Franchisee, such sums shall include all damages, costs, and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of the default and termination.
- 16.02 Discontinue Use of Marks and Confidential Information. Upon the termination or expiration (without Franchisee's successful exercise of the right to acquire a successor franchise) of this Agreement, Franchisee and its Owners will:
- (a) Promptly, and in no event more than three (3) days after the termination or expiration of this Agreement, provide to Franchisor any and all information Franchisor requests regarding events, products or services to be provided by Franchisee or the Facial Bar after the date of expiration or termination, and at Franchisor's option, Franchisee will either (i) pay to Franchisor any amounts it has received from customers for events or products or services to be provided after the date of termination or expiration, and assign to Franchisor or its designee any contracts or related agreements to such events, products or services, or (ii) return such amounts to customers directly as well as any termination fees or penalties under such contracts. Nothing herein will obligate Franchisor to take assignment of any obligations of Franchisee under any such contracts or relieve Franchisee of any liability for its obligations to customers or third parties after the termination or expiration of this Agreement;
- (b) promptly return to Franchisor all material furnished by Franchisor containing proprietary or confidential information, operating instructions, business practices, or methods or procedures, including, without limitation, the Operations Manual;
- (c) discontinue all use of the Marks, including at the Premises and on the vehicle, and the use of any and all signs, products, equipment and other items bearing the Marks.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, upon termination or expiration of the franchise agreement, a franchisee may be subject to several fees. Within ten days of termination or expiration, the franchisee must pay all outstanding amounts, including unpaid Royalty Fees, Marketing Contributions, Technology Fees, and amounts owed for purchases from Face Foundrie or its affiliates, along with any interest and late fees. If the termination results from the franchisee's default, the franchisee is responsible for all damages, costs, expenses, and reasonable attorney's fees incurred by Face Foundrie.
Additionally, if Face Foundrie terminates the franchise agreement due to the franchisee's default, the franchisee must pay liquidated damages within ten days of termination. These damages are calculated as the average monthly Royalty Fees, Marketing Contributions, Technology Fees, and other amounts paid or owed to Face Foundrie during the 12 months before termination, multiplied by either 36 (representing three years) or the number of months remaining in the franchise term, whichever is lower. If the Facial Bar was not open for the entire 12-month period, Face Foundrie may use the average amount of such fees paid by franchisees in the System during such time period, or the Minimum Royalty, whichever is greater.
Furthermore, the franchisee may be required to transfer customer contracts and payments to Face Foundrie for events, products, or services to be provided after the termination or expiration date, or return such amounts directly to customers. These financial obligations aim to compensate Face Foundrie for losses incurred due to the termination and ensure compliance with the franchise agreement's terms.