Are there any damages that the liquidated damages provision for Hck Hot Chicken does NOT cover?

According to Hck Hot Chicken's 2025 Franchise Disclosure Document, the liquidated damages provision does not cover all potential damages to the Franchisor. Specifically, it solely addresses the loss of cash flow from Continuing Royalties and Brand Fund Contributions.

This means that if a franchisee violates the non-competition agreement after termination, the liquidated damages are calculated based on the average monthly Continuing Royalties and Brand Fund Contributions paid during the operation, multiplied by either 36 or the remaining months of the agreement, with a minimum of $30,000. However, this calculation is limited to the loss of cash flow from royalties and brand fund contributions only.

Importantly, the liquidated damages provision does not extend to other damages Hck Hot Chicken might incur. This includes damage to the brand's reputation with the public and landlords, or damages resulting from violations of any other provision within the Franchise Agreement beyond those related to Continuing Royalties and Brand Fund Contributions. Therefore, Hck Hot Chicken retains the right to pursue additional legal remedies for defaults or breaches of the franchise agreement beyond the specified revenue streams.

For a prospective Hck Hot Chicken franchisee, this means that while there is a defined liquidated damages clause for specific breaches, they could still be liable for other types of damages resulting from different violations of the franchise agreement. It is crucial to understand the full scope of potential liabilities beyond the liquidated damages provision.