Is the Manufacturer liable for consequential damages to the 7 Brew owner under the agreement?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) LIMITATION ON DAMAGES: IN NO EVENT SHALL THE PARTIES BE LIABLE TO EACH OTHER, OR TO THEIR RESPECTIVE OFFICERS, EMPLOYEES OR REPRESENTATIVES, OR TO ANY THIRD PARTY, FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES OF OWNER, OWNER'S OFFICERS, EMPLOYEES, REPRESENTATIVES OR INSUREERS, OR OF ANY THIRD PARTY, OF WHATSOEVER NATURE (INCLUDING, BUT NOT LIMITED TO, LOST BUSINESS, LOST PROFITS, DAMAGE TO GOODWILL OR REPUTATION AND/OR DEGRADATION IN VALUE OF BRANDS, TRADEMARKS, TRADENAMES, SERVICES NAMES OR SERVICE MARKS, OR INJURY TO PERSONS) WHETHER ARISING OUT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE, FAILURE TO WARN OR STRICT LIABILITY), CONTRIBUTION, INDEMNITY, SUBROGATION OR OTHERWISE.
Source: Item 23 — RECEIPTS (FDD pages 83–279)
What This Means (2025 FDD)
According to the 2025 FDD, the Manufacturer's liability for consequential damages to the 7 Brew owner is limited under the agreement.
Specifically, Article 8(c) states that neither party, including their officers, employees, or representatives, will be liable to each other or any third party for any indirect, consequential, incidental, special, punitive, or exemplary damages. This includes damages such as lost business, lost profits, damage to goodwill or reputation, degradation in the value of brands, trademarks, or service marks, or injury to persons.
This limitation applies regardless of whether the damages arise from breach of contract, warranty, tort (including negligence, failure to warn, or strict liability), contribution, indemnity, subrogation, or otherwise. This means that a 7 Brew franchisee is restricted from claiming these types of damages from the Manufacturer, and vice versa, offering a degree of protection to both parties against potentially large, indirect claims.