Under what circumstances is a Carvel franchisee not entitled to recover special, consequential, exemplary, or punitive damages?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
Waiver of Exemplary & Punitive Damages.** RCW 19.100.190 permits franchisees to seek treble damages under certain circumstances.
Accordingly, provisions contained in the franchise agreement or elsewhere requiring franchisees to waive exemplary, punitive, or similar damages are void, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, provisions in the franchise agreement that require franchisees to waive exemplary, punitive, or similar damages are generally void. However, there is an exception: such waivers are allowed if they are part of a negotiated settlement reached after the franchise agreement is already in effect. In this case, the agreement must be executed with both Carvel and the franchisee being represented by independent legal counsel. This exception is in accordance with RCW 19.100.220(2).
This means that while Carvel can't force you to waive your right to seek certain damages upfront in the franchise agreement, you could potentially agree to waive these rights later on if you and Carvel settle a dispute, and you have your own lawyer advising you. This protects franchisees from being strong-armed into giving up important legal rights at the outset of the franchise relationship.
It's important for prospective Carvel franchisees to understand this provision, as it clarifies the circumstances under which they might relinquish their right to pursue certain types of damages. Franchisees should seek independent legal advice before agreeing to any settlement that includes a waiver of rights to ensure they fully understand the implications.