Does the Bft Development Agreement include a waiver of punitive damages?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
- G. Waiver of Punitive Damages.
The Parties hereby waive to the fullest extent permitted by law, any right to or claim for any punitive, exemplary, incidental, indirect, special or consequential damages (including, without limitation, lost profits) against each other arising out of any cause whatsoever (whether such cause be based in contract, negligence, strict liability, other tort or otherwise) and agrees that in the event of a dispute, recovery is limited to actual damages.
If any other term of this Agreement is found or determined to be unconscionable or unenforceable for any reason, the foregoing provisions shall continue in full force and effect, including, without limitation, the waiver of any right to claim any consequential damages.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to the 2025 FDD, the Bft franchise agreement includes a waiver of punitive damages. Specifically, the agreement states that the parties waive, to the fullest extent permitted by law, any right to claim punitive, exemplary, incidental, indirect, special, or consequential damages against each other. This waiver applies to any cause of action, whether based in contract, negligence, tort, or otherwise. The agreement limits recovery in the event of a dispute to actual damages.
This waiver means that franchisees are giving up the right to seek certain types of damages, such as punitive damages designed to punish the other party, or consequential damages, which are indirect losses resulting from a breach of the agreement. Instead, franchisees are limited to recovering only the direct, actual losses they incur. This could significantly limit the amount a franchisee can recover in a dispute with Bft.
However, the FDD also includes state-specific riders that modify this waiver in certain jurisdictions. For example, the rider for North Dakota acknowledges that certain parts of the waiver might not be enforceable under North Dakota law and states that the parties agree to enforce the provision to the extent the law allows. Similarly, the Minnesota rider states that the waiver is deleted to the extent required by Minnesota franchises law. These state-specific modifications suggest that the enforceability of the punitive damages waiver can vary depending on the franchisee's location and relevant state laws. Therefore, prospective franchisees should consult with legal counsel to understand the specific implications of this waiver in their state.