Under what circumstances does Buns On Fire not waive recovery of punitive or exemplary damages?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisor agrees to indemnify Franchisee against, and to reimburse Franchisee for, all direct damages, excluding consequential, punitive, or special damages, for which Franchisee is held liable in any proceeding in which Franchisee's use of any Mark pursuant to and in compliance with this Agreement is held to constitute trademark infringement, unfair competition or dilution, and for all costs reasonably
incurred by Franchisee in the defense of any such claim brought against him or in any such proceedings in which he is named as a party, provided that Franchisee has timely notified the Franchisor of such claim or proceedings, has otherwise complied with this Agreement and has tendered complete control of the defense of such to the Franchisor. If the Franchisor defends such claims, the Franchisor shall have no obligation to indemnify or reimburse Franchisee with respect to any fees or disbursements of any attorney retained by Franchisee.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, the franchisee does not waive the recovery of punitive or exemplary damages when indemnified by Buns On Fire against trademark infringement, unfair competition, or dilution. Specifically, Buns On Fire will indemnify the franchisee against direct damages, excluding consequential, punitive, or special damages, for which the franchisee is held liable in any proceeding where the franchisee's use of any mark, in compliance with the agreement, is held to constitute trademark infringement, unfair competition, or dilution.
This indemnification also covers all costs reasonably incurred by the franchisee in defending against such claims, provided the franchisee has promptly notified Buns On Fire of the claim or proceedings, complied with the agreement, and tendered complete control of the defense to Buns On Fire. If Buns On Fire defends such claims, they are not obligated to cover fees for any attorney retained by the franchisee.
In essence, while Buns On Fire generally limits its liability to direct damages and excludes punitive or exemplary damages, this exclusion is waived when the franchisee faces legal action due to their use of Buns On Fire's trademarks, provided the franchisee adheres to the notification and control requirements outlined in the franchise agreement.