Does the Beem Light Sauna agreement allow the arbitrator to award punitive damages?
Beem_Light_Sauna Franchise · 2025 FDDAnswer from 2025 FDD Document
ation proceeding between us and any other person. Notwithstanding the foregoing or anything to the contrary in this Section 16.3, if any court or arbitrator determines that this prohibition on class-wide arbitration is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 16.3, then the parties agree that this arbitration clause shall not apply to that dispute and that such dispute will be resolved in a judicial proceeding in accordance with Section 16.3(d) (Excepted Disputes).
- (c) Relief. The arbitrator has the right to award or include in his or her award any relief which he or she deems proper, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees (on a solicitor and its own client basis) and costs, provided that the arbitrator may declare any Mark generic or otherwise invalid or, except as expressly provided in Section 16.5 (Mutual Waiver of Punitive Damages), award any special, consequential, exemplary, or punitive damages against either party (we and you hereby waiving to the fullest extent permitted by law, except as expressly provided in Section 16.5 below, any right to or claim for any special, consequential, exemplary, or punitive damages against the other).
Source: Item 23 — RECEIPT (FDD pages 71–230)
What This Means (2025 FDD)
According to the 2025 Beem Light Sauna Franchise Disclosure Document, the standard franchise agreement generally prohibits an arbitrator from awarding special, consequential, exemplary, or punitive damages. Specifically, both Beem Light Sauna and the franchisee waive any right to claim such damages against each other to the fullest extent permitted by law. This mutual waiver is designed to limit potential financial exposure in case of disputes.
However, there are exceptions to this waiver. The agreement does allow for the recovery of special, consequential, exemplary, or punitive damages in certain specific instances. These exceptions include the franchisee's obligation to indemnify Beem Light Sauna for third-party claims, claims related to the franchisee's infringement of Beem Light Sauna's intellectual property, and claims arising from the franchisee's breach of obligations concerning proprietary information as outlined in Section 10 of the agreement.
Furthermore, the Beem Light Sauna agreement specifies that the arbitrator can award money damages, including interest on unpaid amounts, specific performance, injunctive relief, and attorneys' fees and costs. The arbitrator also has the authority to determine the interest rate applied to damages, subject to a minimum rate of 2.5% per annum above the Citibank Preference Rate or the maximum rate permitted by applicable law, whichever is less. This ensures that while punitive damages are generally waived, other forms of relief are still available to address breaches of the agreement.