What relief is the arbitrator prohibited from awarding in a dispute involving Carvel?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
the arbitrator may not declare any Mark generic or otherwise invalid or, except as expressly provided in Section 19.1.F. (Waiver of Punitive Damages), award any special, consequential, exemplary, or punitive damages against either party (we and you hereby waiving to the fullest extent permitted by law, except as expressly provided in Section 19.1.F. below, any right to or claim for any special, consequential, exemplary, or punitive damages against the other).
- F.
Waiver of Punitive Damages.
EXCEPT FOR YOUR OBLIGATION TO INDEMNIFY US FOR THIRD PARTY CLAIMS UNDER SECTION 13.1 (INDEMNIFICATION), CLAIMS FOR YOUR INFRINGEMENT OF OUR INTELLECTUAL PROPERTY, AND CLAIMS FOR YOUR BREACH OF YOUR OBLIGATIONS UNDER SECTION 15.2 (PROTECTION OF CONFIDENTIAL INFORMATION AND TRADE SECRETS) OF THIS AGREEMENT, NEITHER PARTY WILL BE ENTITLED TO RECOVER SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES UNDER THIS AGREEMENT.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, in disputes subject to arbitration, the arbitrator is restricted in the type of relief that can be awarded. Specifically, the arbitrator cannot declare any of Carvel's marks generic or otherwise invalid.
Furthermore, the arbitrator is generally prohibited from awarding special, consequential, exemplary, or punitive damages against either party. This limitation is mutual, applying to both Carvel and the franchisee. However, this waiver of punitive damages does not apply to the franchisee's obligation to indemnify Carvel for third-party claims, claims for infringement of Carvel's intellectual property, and claims for breach of obligations related to the protection of confidential information and trade secrets.
This means that while an arbitrator can award damages to compensate for direct losses, they cannot impose additional penalties or awards intended to punish the breaching party. Prospective franchisees should understand this limitation as it could impact the potential recovery in the event of a dispute with Carvel that goes to arbitration. It is advisable to consult with a legal professional to fully understand the implications of this clause.