To what extent do the Franchisor and Franchisee of Casiola waive their right to punitive damages against each other?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
TION ARISING OUT OF, OR RELATING TO, THIS AGREEMENT, OR THE RELATIONSHIP BETWEEN FRANCHISEE AND FRANCHISOR RESULTING FROM THIS AGREEMENT, SHALL BE BARRED UNLESS SUCH CLAIM AND/OR CAUSE OF ACTION IS COMMENCED WITHIN TWO YEARS FROM THE DATE ON WHICH THE ACT OR EVENT GIVING RISE TO THE CLAIM OCCURRED OR ONE YEAR FROM THE DATE ON WHICH FRANCHISEE OR FRANCHISOR KNEW, OR SHOULD HAVE KNOWN, IN THE EXERCISE OF REASONABLE DILIGENCE, OF THE FACTS GIVING RISE TO SUCH CLAIM AND/OR CAUSE OF ACTION, WHICHEVER OCCURS FIRST IN TIME.
18.J. WAIVER OF PUNITIVE DAMAGES
FRANCHISOR AND FRANCHISEE HEREBY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, EXEMPLARY, CONSEQUENTIAL OR SPECULATIVE DAMAGES AGAINST THE OTHER AND AGREE THAT IN THE EVENT OF A DISPUTE BETWEEN THEM, EXCEPT AS OTHERWISE PROVIDED HEREIN, EACH SHALL BE LIMITED TO THE RECOVERY OF ACTUAL DAMAGES SUSTAINED BY IT, PROVIDED THAT SUCH WAIVER SHALL NOT APPLY TO ANY CLAIM: (A) ALLOWED BY FRANCHISOR OR FRANCHISEE FOR ATTORNEY'S FEES OR COSTS AND EXPENSES UNDER THIS AGREEMENT; AND/OR (B) FOR LOST PROFITS BY FRANCHISOR OR FRANCHISEE AND THE OWNERS UPON OR ARISING OUT OF THE TERMINATION OF THIS AGREEMENT.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, both the franchisor and franchisee waive their rights to claim punitive, exemplary, consequential, or speculative damages against each other to the fullest extent permitted by law. This means that in the event of a dispute, both parties are generally limited to recovering only the actual damages they have sustained.
However, there are exceptions to this waiver. The waiver does not apply to claims allowed by either Casiola or the franchisee for attorney's fees, costs, or expenses as outlined in the agreement. Additionally, the waiver does not extend to claims for lost profits by either Casiola or the franchisee and the owners resulting from the termination of the agreement.
It's also important to note that if any other term of the agreement is found to be unconscionable or unenforceable, the waiver of punitive, exemplary, incidental, indirect, special, consequential, or other similar damages will remain in full effect. Furthermore, provisions requiring the franchisee to consent to a waiver of exemplary and punitive damages are not enforceable under Section 51-19-09 of the North Dakota Franchise Investment Law for North Dakota franchisees.