To what extent does an Aplus franchisee waive claims for consequential, punitive, or exemplary damages against the franchisor?

According to Aplus's 2024 Franchise Disclosure Document, a franchisee waives their right to claim consequential, punitive, or exemplary damages against Aplus to the extent permitted by law. Furthermore, the maximum damages recoverable by the franchisee for any claims, whether arising under contract or tort law, are limited to a refund of the franchisee's Franchise Fee and Royalty Fees paid to Aplus within the past eighteen (18) month period, again, to the extent permitted by law.

This waiver means that an Aplus franchisee's potential financial recovery from legal claims against the franchisor is capped. The franchisee cannot seek compensation for indirect losses (consequential damages) or damages intended to punish Aplus (punitive or exemplary damages). The limitation to the franchise fee and royalties paid in the last 18 months significantly restricts the potential recovery, especially if the franchisee has been operating for longer than that or has incurred substantial damages beyond those fees.

Such limitations on damages are relatively common in franchise agreements. Prospective Aplus franchisees should carefully consider this limitation and consult with legal counsel to understand the implications before investing in the franchise. They should assess their risk tolerance and consider whether the potential returns of the Aplus franchise opportunity outweigh the limited legal recourse available to them.