Does the waiver of punitive damages in the Bft agreement apply to claims based on negligence?

According to Bft's 2025 Franchise Disclosure Document, the franchise agreement includes a waiver of punitive damages that applies to claims based on negligence. Specifically, the document states that the parties waive any right to punitive damages arising out of any cause whatsoever, whether based in contract, negligence, strict liability, other tort, or otherwise. The agreement clarifies that in the event of a dispute, recovery is limited to actual damages.

This waiver means that a Bft franchisee is giving up the right to seek punitive damages from Bft, and Bft is giving up the right to seek punitive damages from the franchisee, even if the dispute arises from negligence. Punitive damages are intended to punish a party for egregious behavior and are awarded in addition to actual damages, which compensate for direct losses. By agreeing to this waiver, a franchisee's potential recovery in a dispute with Bft is limited to the actual financial harm suffered.

It is important to note that the waiver of punitive damages may not be enforceable in all jurisdictions. For example, the rider to the Multi-Unit Agreement for use in North Dakota states that Franchisor and Franchisee acknowledge that certain parts of this provision might not be enforceable under the North Dakota Franchise Investment Law, but both parties agree to enforce the provision to the extent the law allows. Similarly, the rider to the Multi-Unit Agreement for use in Minnesota states that if and then only to the extent required by the Minnesota Franchises Law, Sections 12.G (Waiver of Punitive Damages) and 12.H (Waiver of Jury Trial) of the Multi-Unit Agreement are hereby deleted. A prospective franchisee should consult with a legal professional to understand the enforceability of this waiver in their specific state or jurisdiction.