Are punitive damages included in the definition of 'Losses' for Bhc?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) The term "Losses" means, refers to, and includes all "Expenses" (as defined in section 16.2(e) below), liabilities, obligations, losses, fines, penalties, costs, or damages including all reasonable out of pocket fees and disbursements of legal counsel in the investigation or defense of any of the same or in asserting any party's respective rights hereunder but excluding punitive damages (unless resulting from third party claims).
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the definition of 'Losses' generally excludes punitive damages, except in specific circumstances. The term 'Losses' encompasses various expenses, liabilities, obligations, losses, fines, penalties, costs, and damages, including reasonable out-of-pocket fees and legal counsel disbursements for investigations or defenses.
However, punitive damages are excluded from this definition unless they result from third-party claims. This means that if Bhc is subject to claims from outside parties that lead to punitive damages, those damages could be included as 'Losses' for which a franchisee might be responsible under the agreement's indemnification provisions.
This distinction is important for prospective Bhc franchisees because it clarifies the extent of their potential financial responsibilities in the event of legal claims or other liabilities. Franchisees should carefully review the indemnification clauses in the franchise agreement to fully understand their obligations and potential exposure to different types of damages, including those arising from third-party claims.