Does the Bombs Away franchise agreement allow for punitive damages?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.2 Damages. In any controversy or claim arising out of or relating to this Agreement, each party waives any right to punitive or other monetary damages not measured by the prevailing party's actual damages, except damages expressly authorized by federal statute and damages expressly authorized by this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, the franchise agreement includes a waiver of punitive damages. Specifically, in any dispute arising from the franchise agreement, both Bombs Away and the franchisee waive the right to seek punitive or other monetary damages that are not directly related to the prevailing party's actual losses.
However, there are exceptions to this waiver. The waiver does not apply to damages expressly authorized by federal statute or damages expressly authorized by the franchise agreement itself. This means that if a federal law specifically allows for punitive damages in a certain type of case, or if the Bombs Away franchise agreement outlines specific situations where punitive damages are permitted, then those damages may still be pursued.
This clause is fairly common in franchise agreements. By including this clause, Bombs Away aims to limit its potential liability in case of disputes with franchisees, and franchisees similarly limit their exposure. Prospective franchisees should be aware of this waiver and understand that, in most cases, they will only be able to recover actual damages if they win a dispute against Bombs Away.