Can the arbitrator assess punitive or exemplary damages in an All Dogs Unleashed arbitration?
All_Dogs_Unleashed Franchise · 2025 FDDAnswer from 2025 FDD Document
The decision of the arbitrator is final and binding on all parties to the dispute; however, the arbitrator may not under any circumstances: (1) stay the effectiveness of any pending termination of this Agreement; (2) assess punitive or exemplary damages; (3) certify a class or a consolidated action; or (4) make any award that extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set.
Source: Item 23 — RECEIPTS (FDD pages 49–158)
What This Means (2025 FDD)
According to All Dogs Unleashed's 2025 Franchise Disclosure Document, an arbitrator cannot assess punitive or exemplary damages. Specifically, the document states that "the arbitrator may not under any circumstances… assess punitive or exemplary damages." This limitation is a notable aspect of the arbitration agreement that potential franchisees should carefully consider.
However, the franchise agreement also includes a damage waiver where both parties expressly waive any claim for punitive, multiple, and/or exemplary damages. There is an exception to this waiver that applies to All Dogs Unleashed. This exception includes the franchisee's obligation to indemnify All Dogs Unleashed and any claims All Dogs Unleashed brings against the franchisee, guarantors, or owners for unauthorized use of the Marks, unauthorized use or disclosure of Confidential Information, unfair competition, breach of confidentiality or non-competition covenants, and/or any cause of action under the Lanham Act. In these specific cases, All Dogs Unleashed is entitled to receive an award of multiple damages, attorneys' fees, and all damages as provided by law.
Furthermore, if a final determination or applicable law states that punitive, multiple, and/or exemplary damages cannot be waived, any recovery by any party in arbitration or other forum must never exceed two times actual damages. However, All Dogs Unleashed can recover more than two times their actual damages if the franchisee commits acts of willful trademark infringement or otherwise violates the Lanham Act, as provided by law. This clause provides a limited exception where the franchisor may be able to recover more than actual damages under specific circumstances, even though the arbitrator is generally restricted from awarding punitive or exemplary damages.