What is the Liquidated Damages amount upon breach of confidentiality for 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 may be liable for liquidated damages of $100,000 for each breach of confidentiality. This fee is payable to Gold Star on demand and is non-refundable.
The FDD specifies that this liquidated damages clause applies not only to the franchisee but also to their officers individually. It extends liability to breaches of confidentiality by the franchisee's partners, shareholders, officers, directors, employees, agents, or any other person under their control. This broad scope means a franchisee could be held responsible for the actions of a wide range of individuals associated with their business.
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 $100,000 payment. Furthermore, the franchisee is responsible for covering Gold Star's costs and expenses, including attorney's fees and court costs, related to enforcing or protecting Gold Star's rights under the Franchise Agreement. This includes costs incurred in preparation for, investigation, or contemplation of any related legal actions.