Are punitive damages waived by both parties in the Bananas Smoothies Frozen Yogurt agreement?

According to the 2025 Bananas Smoothies Frozen Yogurt FDD, both the franchisor and franchisee waive the right to claim any consequential, punitive, or exemplary damages against each other to the fullest extent permitted by law. This means that in the event of a dispute, both parties are limited to recovering only the actual damages they sustained.

This waiver has significant implications for prospective Bananas Smoothies Frozen Yogurt franchisees. It limits the potential financial recovery in case of a dispute with the franchisor, preventing franchisees from seeking large damage awards beyond their direct losses. While this could protect franchisees from excessive claims by the franchisor, it also limits their ability to be fully compensated for damages caused by the franchisor's actions, even if those actions are egregious.

Such waivers are relatively common in franchise agreements. Franchise systems often include these clauses to manage risk and ensure predictability in dispute resolution. However, franchisees should carefully consider the implications of waiving the right to punitive damages, as it could affect their legal recourse in certain situations. It is advisable to consult with a legal professional to fully understand the scope and impact of this waiver before signing the franchise agreement.