Does the All States M.E.D. franchise agreement allow franchisees to seek punitive damages?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
As to any Claims, you and we agree to waive our rights, if any, to seek or recover punitive damages.
NORTH DAKOTA ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.
- The provisions concerning choice of law, jurisdiction and venue, jury waiver, and waiver of punitive damages are hereby deleted and in their place is substituted the following language:
"You agree to bring any claim against us, including our present and former employees, agents, and affiliates, which in any way relates to or arises out of this Agreement, or any of the dealings of the parties hereto, solely in arbitration before the American Arbitration Association."
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, the standard franchise agreement includes a waiver of the right to seek or recover punitive damages. Specifically, both All States M.E.D. and the franchisee agree to waive their rights to seek punitive damages in any claims against each other. If a dispute arises, both parties are limited to recovering actual damages, which can include reasonable accounting and legal fees as provided in another section of the agreement. The franchisee also waives any right to consequential damages in claims against All States M.E.D.
However, this waiver of punitive damages does not apply to franchisees in North Dakota. The North Dakota addendum to the franchise agreement specifically deletes the provisions concerning the waiver of punitive damages. This means that franchisees operating in North Dakota retain their legal right to seek punitive damages in disputes with All States M.E.D., as allowed under North Dakota law.
This difference highlights the importance of understanding state-specific addenda to the franchise agreement. Franchisees should carefully review any addenda applicable to their state to understand how the standard terms of the franchise agreement may be modified or superseded by local laws. The FDD also includes addenda for Minnesota and Rhode Island, which modify certain terms of the standard agreement to comply with state laws.