Under what condition does a Focalpoint Coaching franchisee have to pay brand damages?
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 will incur brand damages if they terminate the Franchise Agreement before its expiration date. The amount for brand damages will vary based on the circumstances and are due as incurred.
Brand Damages, as specified in Note 6, encompass all expenses, costs, and fees associated either directly or indirectly with the early termination. This includes, but is not limited to, lost royalties, lost profits, loss of goodwill, damage to Focalpoint Coaching's marks and reputation, lost opportunities, travel and personnel costs, expenses incurred in finding another franchise owner, and any other lost payments or benefits Focalpoint Coaching would have received for the balance of the term of the Franchise Agreement after the effective date of termination.
This clause is significant for prospective Focalpoint Coaching franchisees as it highlights the potential financial repercussions of prematurely ending the franchise agreement. Franchisees should carefully consider the length and terms of the agreement, as well as their long-term business plans, to avoid incurring these potentially substantial brand damage costs. It is common in franchising for early termination to trigger damage payments to compensate the franchisor for lost future revenue and the costs of finding a replacement franchisee.