Is a Caring Transitions arbitrator allowed to award punitive damages?

According to Caring Transitions' 2025 Franchise Disclosure Document, arbitrators are not allowed to award punitive damages. The document states that the arbitrators do not have the power to award special, indirect, consequential, or punitive damages. This limitation is set in place to restrict potential damage awards to actual damages sustained by either party in a dispute.

This means that if a franchisee has a dispute with Caring Transitions that goes to arbitration, the arbitrator's ability to award damages is limited. The franchisee can only recover the actual financial losses they have suffered, and cannot receive additional compensation intended to punish the other party. This waiver of punitive damages applies to both Caring Transitions and the franchisee, ensuring neither party can seek such damages from the other.

This type of clause is relatively common in franchise agreements. It aims to manage risk and prevent excessively large arbitration awards. Prospective franchisees should understand that by agreeing to this clause, they are giving up the right to pursue punitive damages in an arbitration setting, which could be a significant factor in disputes involving serious misconduct or negligence.