Are punitive or exemplary damages allowed in arbitration for Batteries Plus Bulbs franchise disputes?

According to the 2025 Batteries Plus Bulbs Franchise Disclosure Document, the arbitrator(s) in any arbitration proceeding are specifically prohibited from assessing punitive or exemplary damages. This means that if a dispute between a franchisee and Batteries Plus Bulbs goes to arbitration, the arbitrator cannot award damages intended to punish Batteries Plus Bulbs for their actions or to set an example for others.

This limitation on the arbitrator's power is a significant factor for prospective franchisees to consider. While arbitration generally aims to resolve disputes more quickly and efficiently than litigation, the inability to seek punitive damages could limit the potential financial recovery in cases where Batteries Plus Bulbs's conduct is particularly egregious. The franchisee is limited to recovering actual damages, such as lost profits or expenses incurred as a result of the franchisor's actions.

It is also important to note that the arbitrator(s) cannot stay the effectiveness of any pending termination of the agreement or make any award that extends, modifies, or suspends any lawful term of the agreement or any reasonable standard of business performance set by Batteries Plus Bulbs. The proceedings will be conducted under the Commercial Arbitration Rules of the American Arbitration Association, or the rules of such other arbitration services organization as the parties otherwise may agree upon in writing, to the extent such rules are not inconsistent with the provisions of this arbitration provision or the Federal Arbitration Act.

This clause ensures that the arbitrator's role is limited to interpreting the existing agreement and resolving disputes within its framework, rather than imposing new obligations or altering the fundamental terms of the franchise relationship. Prospective franchisees should carefully weigh the implications of these restrictions on the arbitrator's authority before entering into a franchise agreement with Batteries Plus Bulbs.