If a franchisee sues Amorino for breach of contract, are punitive damages recoverable?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
- G. WAIVER OF PUNITIVE DAMAGES. WE AND YOU HEREBY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM OF ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER AND AGREE THAT IN THE EVENT OF A DISPUTE BETWEEN THEM EACH SHALL BE LIMITED TO THE RECOVERY OF ANY ACTUAL DAMAGES SUSTAINED BY IT.
- H. ACKNOWLEDGMENT OF BUSINESS ENTITY. YOU ACKNOWLEDGE THAT YOU MAY SEEK DAMAGES OR ANY REMEDY UNDER LAW OR EQUITY ONLY AGAINST OUR BUSINESS ENTITY. OUR AFFILIATES AND OUR AND THEIR RESPECTIVE OFFICERS, DIRECTORS, MANAGERS, MEMBERS, PARTNERS, SHAREHOLDERS, INDEPENDENT CONTRACTORS AND EMPLOYEES WILL NOT BE LIABLE AND MAY NOT BE NAMED AS A PARTY AND SHALL NOT BE LIABLE IN ANY PROCEEDING COMMENCED BY YOU IF YOUR CLAIM ARISES OUT OF OR RELATES TO THIS AGREEMENT.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, both Amorino and the franchisee waive the right to claim punitive or exemplary damages against each other to the fullest extent permitted by law. In the event of a dispute, both parties are limited to recovering actual damages sustained. This waiver is mutual, applying equally to Amorino and its franchisees.
This waiver of punitive damages has significant implications for prospective Amorino franchisees. It means that if a franchisee sues Amorino for breach of contract, even if they win the case, they can only recover the actual financial losses they incurred. They cannot receive additional damages intended to punish Amorino for particularly bad behavior. This could limit the potential financial recovery in a lawsuit against the franchisor.
Such waivers are relatively common in franchise agreements. Franchise agreements often include clauses that limit the types of damages a franchisee can recover in a dispute with the franchisor. This helps to manage the franchisor's risk and potential liability. However, franchisees should carefully consider the implications of such waivers, as they can limit their legal recourse in the event of a dispute.
In addition to the waiver of punitive damages, the Amorino franchise agreement specifies that franchisees can only seek damages or remedies against Amorino's business entity. The agreement protects Amorino's affiliates, officers, directors, managers, members, partners, shareholders, independent contractors, and employees from being held liable in any proceeding commenced by the franchisee. This further limits the franchisee's potential avenues for legal recourse.