Are punitive damages recoverable by a 7 Brew owner from the Manufacturer under any circumstances?
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 7 Brew Franchise Disclosure Document, under no circumstances are punitive damages recoverable by a 7 Brew owner from the Manufacturer. The document states that in no event shall the parties be liable to each other for any indirect, consequential, incidental, special, punitive, or exemplary damages. This limitation applies to the owner, their officers, employees, representatives, or insurers, or any third party.
This waiver includes damages of any nature, such as lost business, lost profits, damage to goodwill or reputation, degradation in the value of brands, trademarks, trade names, service names or service marks, or injury to persons. The waiver applies whether the damages arise out of breach of contract, warranty, tort (including negligence, failure to warn, or strict liability), contribution, indemnity, subrogation, or otherwise.
This clause is significant for prospective franchisees as it limits the potential financial recovery from the Manufacturer, even in cases of gross negligence or willful misconduct. Franchisees should carefully consider this limitation and consult with legal counsel to understand the implications before entering into an agreement. It is common for franchise agreements to contain limitations on liability, but the scope and enforceability can vary.