What does Focalpoint Coaching consider 'Brand Damages' to include when a franchisee terminates the agreement early?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) If this Agreement is terminated by Franchisee before the Term expires pursuant to Subsections 14.B, 14.D, or 14.E above, then Franchisee acknowledges and confirms that Franchisor will suffer and incur substantial damages because this Agreement did not continue for the Term's full length. Accordingly, Franchisee agrees to pay Franchisor for all damages, costs, expenses, attorneys' and experts' fees directly or indirectly related thereto, including, without limitation, lost Royalties, lost profits, loss of goodwill and damage to the Marks and reputation, lost opportunities, travel and personnel costs, expenses that Franchisor may incur in developing or finding another franchise owner to establish and operate a new FocalPoint Franchised Business in the Territory, and any other lost payments or benefits Franchisor would have received for the balance of the Term after the effective date of termination (collectively, "Brand Damages"). Franchisee further acknowledges and agrees that its obligation to pay Brand Damages resulting from early termination shall be in addition to (not in lieu of) Franchisee's posttermination obligations to pay other amounts due as of the date of termination (as contemplated under the preceding Subsection (1) above) and to otherwise comply with the entirety of Section 15 hereof, and that the Brand Damages shall not be deemed a
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, if a franchisee terminates the agreement before the end of the term, Focalpoint Coaching considers that it will incur substantial damages. The franchisee agrees to pay Focalpoint Coaching for all damages, costs, expenses, attorneys' and experts' fees directly or indirectly related to the early termination.
These 'Brand Damages' specifically include lost royalties, lost profits, loss of goodwill and damage to the Marks and reputation, lost opportunities, travel and personnel costs, and expenses that Focalpoint Coaching may incur in developing or finding another franchise owner to establish and operate a new FocalPoint Franchised Business in the Territory. It also includes any other lost payments or benefits Focalpoint Coaching would have received for the balance of the Term after the effective date of termination.
The agreement clarifies that the obligation to pay Brand Damages is in addition to any other amounts due as of the termination date and compliance with Section 15 of the agreement. The Brand Damages are not considered a penalty for early termination but are viewed as reasonable compensation to Focalpoint Coaching for the franchisee's failure to perform under the agreement for the remainder of the term.