Under what condition are Liquidated Damages due to Gokhale Method?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
S
| TYPEOFFEE | AMOUNT | DUEDATE | REMARKS |
|---|---|---|---|
| Royalty | $10 – $180 per person per course; see Ex. |
Source: Item 6 — OTHER FEES (FDD pages 11–13)
What This Means (2024 FDD)
According to Gokhale Method's 2024 Franchise Disclosure Document, liquidated damages become due if the franchise agreement is terminated by Gokhale Method for cause before the end of its term.
The amount of these damages is calculated using a formula based on the franchisee's average monthly royalty fee and Brand Fund Contribution (if any) over the 12 months preceding termination (or a shorter period if the business has been open for less than 12 months). This average is then multiplied by the lesser of 18 months or the number of months remaining in the franchise agreement's term.
This means that if Gokhale Method terminates the agreement due to a franchisee's breach or other cause, the franchisee will have to pay a sum intended to compensate Gokhale Method for the lost future royalties and brand fund contributions. The amount can vary depending on the franchisee's recent financial performance and the time remaining on the franchise term. Prospective franchisees should carefully consider the implications of this clause and seek legal advice to fully understand their potential liability upon early termination.