Under what circumstances must a Face Foundrie franchisee pay liquidated damages?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
Note 9: If we terminate your Franchise Agreement due to your breach, in addition to other amounts owed, you must pay us within 10 days after the effective date of termination liquidated damages equal to the average monthly Royalty Fees, Marketing Contributions, Technology Fees, and other amounts you paid or owed to us during the 12 months of operation preceding the effective date of termination (provided that if your Facial Bar was not open during this entire 12-month period, we may use the average amount of such fees paid to us by franchisees in the System during such time period) multiplied by (a) 36 (being the number of months in three full years), or (b) the number of months remaining in the Franchise Agreement had it not been terminated, whichever is lower.
Source: Item 6 — OTHER FEES (FDD pages 15–22)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, a franchisee must pay liquidated damages if Face Foundrie terminates the Franchise Agreement due to the franchisee's breach. This payment is in addition to any other amounts owed to Face Foundrie. The liquidated damages are due within 10 days after the termination date.
The amount of liquidated damages is calculated based on the average monthly Royalty Fees, Marketing Contributions, Technology Fees, and other amounts the franchisee paid or owed to Face Foundrie during the 12 months before termination. 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 other franchisees in the system during that time. This average monthly amount is then multiplied by either 36 (representing three full years) or the number of months remaining in the Franchise Agreement had it not been terminated, whichever is lower.
For a prospective Face Foundrie franchisee, this means that if they breach the Franchise Agreement and Face Foundrie terminates the agreement, they will be responsible for paying a significant sum in liquidated damages. This amount could be substantial, as it is based on a multiple of the average monthly fees paid over a year. The calculation method ensures that Face Foundrie is compensated for the lost future revenue stream from the terminated franchise. Franchisees should, therefore, carefully adhere to the terms of the Franchise Agreement to avoid potential termination and the associated liquidated damages.