Does Buona waive the right to claim punitive damages against the franchisee?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 24.9 DAMAGES.
FRANCHISOR AND FRANCHISEE HEREBY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM OF ANY CONSEQUENTIAL, PUNITIVE, OR EXEMPLARY DAMAGES AGAINST THE OTHER, AND AGREE THAT IN THE EVENT OF A DISPUTE BETWEEN THEM EACH SHALL BE LIMITED TO THE RECOVERY OF ANY ACTUAL DAMAGES SUSTAINED BY IT.
Source: Item 23 — RECEIPTS (FDD pages 78–356)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, both Buona and the franchisee waive the right to claim punitive, consequential, or exemplary damages against each other. Instead, both parties are limited to recovering only actual damages sustained in the event of a dispute. This mutual waiver is intended to limit the financial exposure of both parties in case of legal conflicts.
This waiver means that if a franchisee believes Buona has acted wrongly, the franchisee can only recover the direct financial losses they've suffered, not additional damages intended to punish Buona. Similarly, Buona's recovery from a franchisee is limited to actual damages. This arrangement can reduce the risk of large, unpredictable damage awards in disputes.
Such waivers are relatively common in franchise agreements. They aim to create a more predictable legal landscape and encourage parties to resolve disputes based on actual harm rather than the threat of substantial punitive damages. However, franchisees should carefully consider the implications of waiving the right to seek punitive damages, as it could limit their potential recovery in certain situations where Buona's conduct is particularly egregious.
It is important for prospective franchisees to consult with a legal professional to fully understand the implications of this and other clauses in the franchise agreement. Understanding the limitations on damages can help a franchisee assess the potential risks and rewards of investing in a Buona franchise.