Does the Apricot Lane franchise agreement allow for punitive or exemplary damages in arbitration?

According to the 2025 Apricot Lane Franchise Disclosure Document, the franchise agreement generally includes a waiver of punitive or exemplary damages in disputes between the franchisor and franchisee. This means that, in most cases, if a dispute arises, neither party can seek punitive damages (damages intended to punish the other party for their conduct) or exemplary damages (damages exceeding simple compensation and awarded to punish). Instead, the claiming party is typically limited to equitable relief and recovery of actual, direct damages sustained.

However, there are specific exceptions to this waiver. The waiver of punitive damages does not apply to indemnification obligations under Section 21.C of the agreement, or to claims based on unauthorized use of the Apricot Lane marks or unauthorized use or disclosure of confidential information. In these specific cases, the right to claim punitive, exemplary, and treble damages is retained.

This waiver of punitive damages is a fairly common practice in franchise agreements. It aims to limit the potential financial exposure of both the franchisor and franchisee in the event of a dispute, encouraging resolution based on actual losses rather than potentially inflated punitive awards. However, franchisees should be aware of the exceptions and understand the circumstances under which they might still be able to pursue or be subject to such damages.