Under what circumstances does the waiver of punitive and exemplary damages NOT apply to a 7 Brew franchisee?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
EXCEPT FOR YOUR INDEMNIFICATION OBLIGATIONS UNDER SECTION 20.E AND CLAIMS BASED ON YOUR UNAUTHORIZED USE OF THE MARKS OR UNAUTHORIZED USE OR DISCLOSURE OF ANY CONFIDENTIAL INFORMATION, WE AND YOU (AND YOUR OWNERS) WAIVE TO THE FULLEST EXTENT THE LAW PERMITS ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, EXEMPLARY, TREBLE, AND OTHER FORMS OF MULTIPLE DAMAGES AGAINST THE OTHER AND AGREE THAT, IF THERE IS A DISPUTE BETWEEN US AND YOU (AND/OR YOUR OWNERS), THE PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY ACTUAL DAMAGES HE, SHE, OR IT SUSTAINS.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, both 7 Brew and its franchisees waive the right to claim punitive, exemplary, treble, or other multiple damages against each other. This means that in most disputes, the parties are limited to seeking equitable relief and recovering actual damages.
However, this waiver does not apply under specific circumstances. The waiver of punitive and exemplary damages does not apply to a franchisee's indemnification obligations as outlined in Section 20.E of the franchise agreement. Additionally, the waiver does not apply to claims based on a franchisee's unauthorized use of 7 Brew's trademarks or unauthorized use or disclosure of any confidential information.
In these specific cases, 7 Brew retains the right to seek punitive or exemplary damages from the franchisee, and vice versa. This exception is typical in franchising to protect the brand's intellectual property and ensure franchisees fulfill their contractual obligations, particularly those related to protecting confidential information and the brand's reputation.