What is the effect of Section 16.5 on the waiver of punitive damages in Beem Light Sauna arbitrations?

According to Beem Light Sauna's 2025 Franchise Disclosure Document, Section 16.5 addresses the mutual waiver of punitive damages. Generally, this section means that both Beem Light Sauna and the franchisee agree not to seek special, consequential, exemplary, or punitive damages from each other. This waiver applies to any disputes arising under the Franchise Agreement.

However, there are specific exceptions to this waiver. The franchisee's obligation to indemnify Beem Light Sauna for third-party claims under Section 11, claims for infringement of Beem Light Sauna's intellectual property, and claims for breach of obligations under Section 10 (Proprietary Information) are not subject to this waiver. In these specific cases, Beem Light Sauna retains the right to pursue all available damages, including those that are special, consequential, exemplary, or punitive.

For prospective Beem Light Sauna franchisees, this means that while they are protected from punitive damage claims in most disputes with the franchisor, they could still be liable for such damages in cases involving indemnification, intellectual property infringement, or breaches of proprietary information obligations. This is a fairly standard clause in franchise agreements, intended to protect the franchisor's brand and confidential information, while limiting the overall financial risk in typical contractual disputes.