Does the California addendum to the Best Brains Franchise Agreement waive punitive damages?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Schedule 5 STATE ADDENDA TO THE FRANCHISE AGREEMENT
CALIFORNIA ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.
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- The Franchise Agreement is modified to also provide that we defer collection of initial fees until after we have completed our initial obligations to you and the franchise is open for business.
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- Section 7.B. is deleted and in its place is substituted the following:
- 7.B.1 Termination by Us Without Right to Cure. We may terminate this Agreement without notice and the opportunity to cure for any of the following reasons:
- (a) The franchisee or the business to which the franchise relates has been judicially determined to be insolvent, all or a substantial part of the assets thereof are assigned to or for the benefit of any creditor, or the franchisee admits his or her inability to pay his or her debts as they come due;
- (b) The franchisee abandons the franchise by failing to operate the business for five consecutive days during which the franchisee is required to operate the business under the terms of the franchise, or any shorter period after which it is not unreasonable under the facts and circumstances for the franchisor to conclude that the franchisee does not intend to continue to operate the franchise, unless such failure to operate is due to fire, flood, earthquake, or other similar causes beyond the franchisee's control;
- (c) The franchisor and franchisee agree in writing to terminate the franchise;
- (d) The franchisee makes any material misrepresentations relating to the acquisition of the franchise business or the franchisee engages in conduct which reflects materially and unfavorably upon the operation and reputation of the franchise business or system;
- (e) The franchisee fails, for a period of 10 days after notification of noncompliance, to comply with any federal, state, or local law or regulation, including, but not limited to, all health, safety, building, and labor laws or regulations applicable to the operation of the franchise;
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to the 2025 Best Brains Franchise Disclosure Document, the California addendum does not address the waiver of punitive damages. The California addendum modifies certain sections of the franchise agreement, such as deferring the collection of initial fees and outlining specific conditions for termination by Best Brains without the right to cure.
However, the main body of the Best Brains franchise agreement includes a clause regarding punitive damages. Section 10.E states that in any lawsuit, dispute, or claim, both the franchisee and Best Brains agree to waive their rights to seek or recover punitive damages. This waiver is part of a broader section on governing law, which also includes clauses on choice of law, jurisdiction and venue, jury waiver, class action waiver, and limitation of actions.
Since the California addendum does not explicitly address or override the punitive damages waiver in the main agreement, it's important for prospective California franchisees to understand that this waiver may still apply. Franchisees should consult with legal counsel to fully understand the implications of this and other clauses within the franchise agreement and its addenda.