To what extent does Anago waive the right to punitive or exemplary damages in disputes with franchisees?

According to Anago's 2025 Franchise Disclosure Document, both Anago and its subfranchisees waive the right to claim punitive, exemplary, or multiple damages against each other in the event of a dispute. This waiver is made to the fullest extent permitted by law. Consequently, if a dispute arises between Anago and a subfranchisee, the claiming party is limited to seeking equitable relief and recovering only the actual damages sustained. This mutual waiver aims to limit the potential financial exposure of both parties in case of disagreements.

However, there are specific exceptions to this waiver. Anago's subfranchisor's obligation to indemnify Anago for third-party claims under Section 11.2 of the agreement is excluded from this waiver. Additionally, the waiver does not apply to punitive, exemplary, or multiple damages available to either party under United States Federal Trademark Law. This means that if a dispute involves trademark infringement, the affected party may still pursue punitive or exemplary damages as provided by federal law.

Furthermore, in arbitration proceedings, the arbitrator cannot award punitive, exemplary, or multiple damages against any party, reinforcing the waiver. The arbitrator is, however, authorized to award other forms of relief, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees and costs. This ensures that while punitive damages are waived, other remedies remain available to address grievances and ensure fair resolution of disputes.

This waiver of punitive damages is a significant aspect of the Anago franchise agreement. It can impact the potential financial outcomes of disputes, potentially limiting the recovery for franchisees in certain situations while also protecting them from excessive damage claims by the franchisor. Prospective franchisees should carefully consider this provision and its implications, especially in the context of potential disputes and the types of damages that may arise.