Can a Bombs Away franchisee seek punitive damages in a dispute?

According to Bombs Away's 2024 Franchise Disclosure Document, franchisees are restricted from seeking punitive damages in disputes. Specifically, in any controversy or claim arising from the Franchise Agreement, both Bombs Away and the franchisee waive the right to punitive or other monetary damages that are not directly measured by the prevailing party's actual losses.

There are limited exceptions to this waiver. Franchisees or Bombs Away can pursue damages if they are expressly authorized by federal statute or specifically authorized within the Franchise Agreement itself. This means that unless a specific law allows for punitive damages or the agreement outlines circumstances where they are permitted, neither party can seek them.

This waiver of punitive damages is a significant point for potential Bombs Away franchisees. It limits the financial remedies available in case of a dispute, potentially reducing the leverage a franchisee might have in negotiations or legal proceedings. Franchisees are only able to recover direct losses, not additional penalties intended to punish the other party. This type of clause is relatively common in franchise agreements, as franchisors often seek to limit their potential liability and ensure predictability in dispute resolution.