Is Big Air Trampoline Park liable for punitive or exemplary damages in arbitration?
Big_Air_Trampoline_Park Franchise · 2025 FDDAnswer from 2025 FDD Document
12.2 Franchisee shall, during the Term and any Successor Terms and after the termination or expiration of this Agreement, indemnify and defend Franchisor, its Affiliates and their respective officers, directors, managers, members, and employees, and hold them harmless against all claims, demands, losses, damages (including punitive damages), costs, suits, judgments, penalties, expenses (including reasonable attorneys' fees and amounts paid in settlement or compromise) and liabilities of any kind, whether or not ultimately determined to be meritorious (and including damages suffered by Franchisee or any of its property) (collectively, "Damages") for which they are held liable, or which they incur (including travel, investigation and living expenses of employees and witness fees) in any litigation or proceeding as a result of or arising out of:
Source: Item 23 — RECEIPT (FDD pages 53–255)
What This Means (2025 FDD)
The 2025 Franchise Disclosure Document does not explicitly state whether Big Air Trampoline Park is liable for punitive or exemplary damages in arbitration. However, it does state that the franchisee shall indemnify and defend Big Air Trampoline Park, its affiliates, and their respective officers, directors, managers, members, and employees, and hold them harmless against all claims, demands, losses, damages (including punitive damages), costs, suits, judgments, penalties, expenses and liabilities of any kind for which they are held liable. This suggests that while Big Air Trampoline Park seeks to be indemnified against punitive damages, the document does not clarify whether Big Air Trampoline Park can be held liable for such damages in arbitration.
This indemnification clause means that if a claim arises from the franchisee's actions or business operations, the franchisee is responsible for covering Big Air Trampoline Park's losses, including punitive damages. This is a common practice in franchising, where the franchisee's actions can impact the franchisor's brand and reputation. However, the absence of a direct statement about Big Air Trampoline Park's liability for punitive damages in arbitration leaves room for interpretation.
A prospective franchisee should seek clarification from Big Air Trampoline Park regarding their potential liability for punitive damages in arbitration. Understanding the specific circumstances under which Big Air Trampoline Park might be responsible for such damages is crucial for assessing the financial risks associated with the franchise. It is also advisable to consult with a legal professional to fully understand the implications of the indemnification clause and the potential exposure to punitive damages.