Does the Best Brains franchise agreement include a waiver of punitive damages?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
- **E.
Punitive Damages Waiver.** In any lawsuit, dispute, or claim over any Claims, you and we agree to waive our rights, if any, to seek or recover punitive damages.
NORTH DAKOTA ADDENDUM TO THE FRANCHISE AGREEMENT
If any of the terms of the Franchise Agreement are inconsistent with the terms below, the terms below control.
- The provisions concerning choice of law, jurisdiction and venue, jury waiver, and waiver of punitive damages are hereby deleted and in their place is substituted the following language:
"You agree to bring any claim against us, including our present and former employees, agents, and affiliates, which in any way relates to or arises out of this Agreement, or any of the dealings of the parties hereto, solely in arbitration before the American Arbitration Association."
- 10.E. Punitive Damages Waiver. Section 10.E. of the Franchise Agreement is deleted. The following is added to the Franchise Agreement:
"No statement, questionnaire, or acknowledgment signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on any statement made by any franchisor, franchise seller, or other person acting on behalf of the franchisor. This provision supersedes any other term of any document executed in connection with 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 franchise agreement initially includes a waiver of the franchisee's right to seek or recover punitive damages. Specifically, Section 10.E of the standard agreement contains this waiver. However, the FDD also states that for franchisees in North Dakota, the provisions concerning the waiver of punitive damages are deleted and replaced with a requirement to bring any claims against Best Brains solely in arbitration.
Furthermore, the FDD indicates that Section 10.E of the Franchise Agreement, which likely contains the punitive damages waiver, is deleted entirely. In its place, a new provision is added stating that no statement, questionnaire, or acknowledgment signed by a franchisee in connection with starting the franchise can waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on statements made by Best Brains. This new provision supersedes any other conflicting term in any document related to the franchise.
For prospective Best Brains franchisees, this means that while the initial agreement may contain a punitive damages waiver, this waiver may not be enforceable in certain jurisdictions like North Dakota or may be superseded by other provisions protecting the franchisee's rights. Franchisees should carefully review their franchise agreement and any state-specific addenda to understand their rights regarding punitive damages and other legal claims.