Can Gold Star seek other relief besides liquidated damages for a breach of confidentiality?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
o take any action but may take any action it deems appropriate. FRANCHISEE also agrees not to contest or aid in contesting, directly or indirectly, the COMPANY's right, title, ownership or interest in or to, or the validity or enforceability of, any copyrights, Confidential Material or the System, or contest the COMPANY's sole right to register, use or franchise or license others to use any such copyrights, the System or the Confidential Material, during or after the term of this Agreement or any extension or renewal thereof.
- 12.2 Damages for Violations. If FRANCHISEE discloses any Confidential Material to any person, firm or entity or otherwise breaches its obligations under this Section 12, or if one of the Related Parties or any other person subject to FRANCHISEE's control makes such a disclosure or otherwise breaches its obligations under this Section 12 as a result of the failure of FRANCHISEE
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star is not limited to only receiving liquidated damages if a franchisee breaches confidentiality.
Specifically, if a franchisee discloses confidential material, they must pay Gold Star $100,000 as liquidated damages. The FDD states that this amount is not a penalty but a reasonable pre-estimate of actual damages, acknowledging that calculating the precise amount of damages would be extremely difficult.
However, the franchise agreement does not limit Gold Star's options to only monetary damages. Gold Star retains the right to pursue injunctive or other relief in addition to the $100,000 liquidated damages, allowing them to seek court orders to prevent further disclosure or other remedies deemed appropriate by a court.