Is the arbitrator allowed to award punitive damages in a Bhc arbitration?

According to Bhc's 2025 Franchise Disclosure Document, an arbitrator does not have the authority to award punitive damages to either party in a dispute. The FDD states that the parties waive their rights to seek punitive damages from one another to the maximum extent permitted by law.

This means that if a franchisee has a dispute with Bhc that goes to arbitration, the arbitrator's ability to award damages is limited. While the arbitrator can award money damages, specific performance, or injunctive relief, they are specifically prohibited from including punitive damages in the award. This limitation is reciprocal, applying equally to both Bhc and the franchisee.

This waiver of punitive damages is a significant factor for prospective franchisees to consider. Punitive damages are intended to punish a party for egregious misconduct and deter similar behavior in the future. By agreeing to waive the right to seek punitive damages, franchisees are potentially limiting their ability to obtain full compensation in cases of serious misconduct by Bhc. Franchisees should carefully consider the implications of this waiver and consult with legal counsel to understand their rights and options.