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Legacy Acad. Inc. v. JLK Inc.

A franchisor of childcare centers was entitled to the benefit of the bargain it made in the franchise agreement as to one percent of the franchisee's gross monthly revenue to be paid in advertising fees, after the franchisee defaulted on the 20-year franchise agreement, causing the franchisor to terminate the contract.

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Legacy Academy, a franchisor of childcare centers, sued one of its franchisees, JLK, Inc., alleging breach of contract. The trial court granted summary judgment to Legacy,1 reserving for trial its decision on the amount of damages due, if any. After a bench trial, the lower court entered a final judgment in favor of Legacy for $9,729 in royalty fees for the months of November and December 2010, in addition to pre- and post-judgment interest and attorney fees. Legacy appeals from the final judgment, arguing that the amount awarded is insufficient and that the trial court erred in finding that Legacy could not recover damages after December 2010, or any advertising fees either before or after that date. Legacy also claims the trial court erred in determining that it failed to provide sufficient proof quantifying its damages and in finding that OCGA § 51-12-13 does not apply as a basis to discount future royalty fees. We reverse the trial court’s findings as to advertising fees. Further, while we find that lost future royalties may properly be an item of damages, we affirm the court’s determination as to the insufficiency of proof of future royalty fee damages. We remand the case for further proceedings not inconsistent with this opinion.

While we apply a de novo standard of review to any questions of law decided by the trial court, factual findings made after a bench trial shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of witnesses. Indeed, because the clearly-erroneous test in effect employs the same standard as the any evidence rule, appellate courts will not disturb fact findings of a trial court if there is any evidence to sustain them.

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