In an All Team franchise arbitration, can the arbitrator award punitive damages?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator will have the right to award or include in his award any relief which he deems proper in the circumstances, including money damages (with interest on unpaid amounts from date due), specific performance, and attorneys' fees and costs; however, the arbitrator will not be allowed to award or include in his award any punitive, exemplary, or consequential damages, to which the parties waive any right.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, an arbitrator in a dispute will not be allowed to award punitive damages. The document states that the arbitrator cannot include in their award any punitive, exemplary, or consequential damages, as the parties waive any right to them.
This means that if a franchisee has a dispute with All Team that goes to arbitration, the arbitrator's ability to award damages is limited. While the arbitrator can award money damages, specific performance, attorney's fees, and costs, they are specifically prohibited from awarding damages intended to punish All Team for their actions. This waiver of punitive, exemplary, or consequential damages is a significant point for prospective franchisees to consider.
This limitation on damages is a common practice in franchising, as franchisors often seek to limit their potential liability in disputes. However, franchisees should understand that this provision could limit their potential recovery in an arbitration proceeding, even if All Team is found to be at fault. Franchisees should seek legal counsel to fully understand the implications of this clause.