If a Hydrodog franchisee violates the Competitive Restriction, how soon must liquidated damages be paid?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
Therefore, in the event that you violate any of the Competitive Restriction set forth in this Agreement, within 15 calendar days of such violation, you will pay us partial liquidated damages in the amount of our then-current initial franchise fee ("Competitive Liquidated Damages").
You agree that Competitive Liquidated Damages as calculated under this Section represent the best estimate the Franchisor would suffer for its costs and expenses of investigation and its internal non-legal costs to prepare to enforce its rights if you were to violate the Competitive Restriction set forth in this Agreement.
Your payment of the Competitive Liquidated Damages will not be considered a penalty, but instead a reasonable estimate of fair compensation to the Franchisor for some of, but not all of, the damages, costs and expenses it will incur if you violate the Competitive Restriction.
The Franchisor is also be entitled to recover all costs, including attorneys' fees incurred in connection with collection of Liquidated Damages as well as enforcing its rights.
Without limiting the foregoing, the Competitive Liquidated Damages will not be the Franchisor's exclusive remedy, will not prevent us from seeking other actual or consequential damages, injunctive relief enjoining future violations of the Competitive Restriction, nor will it in any way limit the Franchisor' right to assert that we have no adequate remedy at law in the event of breach.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, if a franchisee violates the Competitive Restriction outlined in the franchise agreement, they are required to pay partial liquidated damages within 15 calendar days of the violation. These damages are set to be equivalent to Hydrodog's then-current initial franchise fee.
The purpose of these Competitive Liquidated Damages is to cover Hydrodog's costs and expenses related to investigating the violation and preparing to enforce its rights. Hydrodog considers this amount a reasonable estimate of fair compensation for the damages, costs, and expenses it will incur due to the franchisee's breach of the Competitive Restriction.
It's important to note that the payment of Competitive Liquidated Damages is not considered a penalty. Furthermore, Hydrodog retains the right to pursue additional remedies, including recovering all costs and attorney's fees associated with collecting the liquidated damages and enforcing its rights. Hydrodog can also seek actual or consequential damages and injunctive relief to prevent future violations of the Competitive Restriction, and it can assert that it has no adequate remedy at law in the event of a breach.