Does the Focalpoint Coaching franchisee have to pay 'Brand Damages' if Focalpoint Coaching terminates the agreement?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
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Item 6
OTHER FEES
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Failure to Submit Required Reports | $75 | As incurred | If you fail to send us the reports required by the Franchise Agreement, we may debit your account this amount on the 5th day of the month following your failure to submit the require reports. |
| Costs and | Will vary under | As incurred | Due when you do not comply with the |
| Attorneys’ Fees | circumstances | Franchise Agreement. | |
| Brand Damages | Will vary under circumstances | As incurred | Due only if you terminate the Franchise Agreement before it expires, in which case you must pay us for all Brand Damages related to the early termination. See Note 6. |
| Indemnification | Will vary under circumstances | As incurred | You must reimburse us for claims from your Franchised Business’ operation. |
Source: Item 6 — Other Fees (FDD pages 14–20)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, a franchisee is not required to pay brand damages if Focalpoint Coaching terminates the franchise agreement. The franchisee is only liable for brand damages if the franchisee terminates the Franchise Agreement before it expires. These damages are intended to compensate Focalpoint Coaching for losses incurred due to the early termination.
The FDD specifies that Brand Damages can vary in amount and are due as incurred. These damages encompass a wide range of potential losses, including lost royalties, lost profits, loss of goodwill, and damage to Focalpoint Coaching's marks and reputation. They also include lost opportunities, travel and personnel costs, expenses related to finding a new franchise owner, and any other lost payments or benefits Focalpoint Coaching would have received for the balance of the franchise term.
This provision is fairly standard in franchising, as franchisors seek to protect their brand and revenue streams. However, the broad definition of Brand Damages means that a franchisee who terminates early could face significant financial penalties. A prospective Focalpoint Coaching franchisee should carefully consider the implications of this clause and seek legal counsel to fully understand their potential liabilities before signing the Franchise Agreement.