Can the arbitrator assess punitive or exemplary damages in a Bens Soft Pretzels arbitration?
Bens_Soft_Pretzels Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator must follow the law and not disregard the terms of this Agreement.
The decision of the arbitrator will be final and binding on all parties to the dispute; however, the arbitrators may not, under any circumstances: (i) stay the effectiveness of any pending termination of this Agreement; (ii) assess punitive or exemplary damages; or (iii) make any award that extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set.
Source: Item 22 — CONTRACTS (FDD pages 46–47)
What This Means (2025 FDD)
According to the 2025 Bens Soft Pretzels Franchise Disclosure Document, in most cases, the arbitrator is restricted from awarding punitive or exemplary damages. Specifically, the document states that the arbitrator "may not, under any circumstances... assess punitive or exemplary damages". This limitation is part of the standard arbitration agreement that Bens Soft Pretzels includes in its franchise contracts.
However, there is an exception for franchisees in North Dakota. The North Dakota Addendum to the Franchise Disclosure Document explicitly states that the "Franchise Agreement includes a waiver of exemplary and punitive damages. That requirement will not apply to North Dakota franchisees and is deemed deleted in each place it appears in the Disclosure Document and Franchise Agreement." This means that, unlike franchisees in other states, a North Dakota franchisee may be able to recover punitive or exemplary damages in arbitration if the arbitrator deems it appropriate under North Dakota law.
This difference highlights the importance of understanding state-specific addenda in franchise agreements. Franchisees outside of North Dakota should be aware that they are waiving their right to seek punitive or exemplary damages in arbitration, which could limit their potential recovery in a dispute with Bens Soft Pretzels. Prospective franchisees should consult with a legal professional to fully understand the implications of these arbitration terms and any state-specific modifications.