Key Points
- One of the more important legal obligations in a franchise agreement, almost universal in franchise agreements
- Promise to pay certain damages to the franchisor on any termination
- Could be a substantial exit fee, especially if you are closing for financial reasons
- Risk is if you are a compliant franchisee, you will still be liable for liquidated damages
- Request would be to waive liquidated damages in the event of a closure of your unit for financial reasons
- Can be a difficult point to get a franchisor to approve
- Be sure to utilize our Franchise Negotiation Simulation Chatbot to craft a custom request and practice roleplaying a negotiation with your franchisor