What is the Liquidated Damages amount for each breach of confidentiality related to a Gold Star franchise?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Liquidated Damages upon Breach of Confidentiality14 | $100,000 for each breach | On demand | Payable to Gold Star Non-refundable |
Note 14: You (and each of your officers individually) agree under Section 12.2 of the Franchise Agreement to pay this sum as liquidated damages for any breach of the confidentiality obligations of the Franchise Agreement by you, or any of your partners, shareholders, officers, directors, employees or agents, or any other person subject to your control. The provision for liquidated damages does not preclude Gold Star from seeking injunctive or other relief. You must pay Gold Star on demand, with interest from the date due at the rate applicable to late payments, any costs or expenses (including attorneys' fees, court costs, other litigation expenses, settlement expenses or other expenses of any kind) incurred by Gold Star in enforcing or protecting Gold Star's rights under the Franchise Agreement, or any related judgments, orders or awards, or in preparation for or investigation or contemplation of any of those acts or matters.
Source: Item 6 — OTHER FEES (FDD pages 12–18)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, a franchisee must pay $100,000 as liquidated damages for each breach of confidentiality. This fee is payable to Gold Star on demand and is non-refundable. This requirement is detailed in Item 6, which outlines other fees associated with the franchise.
The liquidated damages apply to breaches of confidentiality obligations as stated in Section 12.2 of the Franchise Agreement. This includes breaches by the franchisee, their partners, shareholders, officers, directors, employees, agents, or any person under their control. The purpose of this fee is to compensate Gold Star for potential harm resulting from the disclosure of confidential information.
It's important to note that the liquidated damages provision does not prevent Gold Star from pursuing injunctive or other legal remedies. In addition to the liquidated damages, the franchisee is responsible for covering all costs and expenses incurred by Gold Star in enforcing or protecting their rights under the Franchise Agreement, including attorney's fees and court costs. This comprehensive approach underscores the importance Gold Star places on maintaining the confidentiality of its proprietary information.