Under what circumstances are liquidated damages applicable upon termination of a Mr. Sandless franchise agreement?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon termination or expiration of this Agreement, you shall:
23.1.1 Promptly pay to us any sums due and owing, and to other persons or entities sums which may result in a claim of liability to us;
23.1.2 Immediately cease using the Proprietary Marks, Copyrights and Confidential Information and refrain from referencing any past association with us;
23.1.3 Immediately discontinue all advertising under the names "Mr.
Sandless" or any similar name, and (iii) de-identify the service vehicle(s) and any office location;
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
Based on the 2025 Mr. Sandless Franchise Disclosure Document, there is no mention of liquidated damages upon termination of the franchise agreement. The document outlines obligations of the franchisee upon termination or expiration of the agreement, such as paying outstanding sums, ceasing use of proprietary marks, discontinuing advertising under the Mr. Sandless name, and de-identifying service vehicles and office locations. However, it does not specify any predetermined or 'liquidated' damage amounts that the franchisee would be required to pay.
The Franchise Agreement does state that the franchisee must promptly pay any sums due and owing to Mr. Sandless, as well as sums owed to other entities that could result in a liability claim against Mr. Sandless. This suggests that the franchisee remains responsible for any outstanding debts or financial obligations at the time of termination.
Prospective franchisees should carefully review the entire Franchise Agreement and consult with legal and financial advisors to fully understand their obligations upon termination, including any potential financial liabilities. It would be prudent to specifically ask the franchisor about whether liquidated damages may be applicable in certain termination scenarios, and if so, under what conditions and for what amounts.