In Indiana, does the Carvel Franchise Agreement provision relieving parties from liability for punitive damages apply?

According to Carvel's 2025 Franchise Disclosure Document, the provisions in the Franchise Agreement that relieve both parties from liability for punitive damages will not apply to franchises offered and sold in Indiana. This means that, in Indiana, a Carvel franchisee or the franchisor can potentially be held liable for punitive damages in legal disputes, notwithstanding any clause in the standard franchise agreement that seeks to prevent this. Punitive damages are typically awarded to punish a party for egregious misconduct and to deter similar behavior in the future.

This modification is outlined in the Indiana Addendum to the Franchise Agreement, which recognizes the requirements of Indiana's Deceptive Franchise Practices Law and Franchise Disclosure Law. The addendum specifically states that the provisions relieving parties from punitive damages do not apply to franchises sold in Indiana. This ensures that Indiana franchisees retain their rights under Indiana law to seek punitive damages if circumstances warrant.

For a prospective Carvel franchisee in Indiana, this is a beneficial provision. It means that if Carvel engages in misconduct that harms the franchisee's business, the franchisee has the right to seek punitive damages in court. Conversely, it also means that Carvel retains the right to seek punitive damages from an Indiana franchisee if the franchisee engages in misconduct that harms the Carvel brand or business. This addendum levels the playing field and ensures that both parties are subject to the full scope of legal remedies available under Indiana law.