Does a Checkersrallys franchisee waive the right to recover consequential, special, and incidental damages?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
18.10 Limitations on Damages.EXCEPT WITH RESPECT TO YOUR OBLIGATION TO INDEMNIFY US FOR THIRD PARTY CLAIMS UNDER SECTION 17.02, AND EXCEPT WITH RESPECT TO OBLIGATIONS REGARDING USE OF THE MARKS IN SECTION 5 AND THE CONFIDENTIAL INFORMATION IN SECTION 7.01, FRANCHISOR AND FRANCHISEE (AND ITS OWNERS) EACH WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER. YOU AND EACH OF YOUR OWNERS WAIVE TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT TO RECOVER CONSEQUENTIAL, SPECIAL AND INCIDENTAL DAMAGES FOR ANY CLAIM DIRECTLY OR INDIRECTLY ARISING FROM OR RELATING TO THIS AGREEMENT.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, franchisees do waive the right to recover consequential, special, and incidental damages. Specifically, the FDD states that the franchisee and their owners waive the right to recover these damages for any claim that directly or indirectly arises from or relates to the franchise agreement. This waiver is applicable to the fullest extent permitted by law.
This waiver means that if a Checkersrallys franchisee believes they have suffered losses beyond direct damages as a result of Checkersrallys's actions or inactions related to the franchise agreement, they will likely be unable to recover compensation for those additional losses. Consequential damages could include lost profits, while special damages might cover unique costs incurred due to a specific situation. Incidental damages could include expenses incurred trying to mitigate losses.
However, it's important to note that this waiver is "to the fullest extent permitted by applicable law," meaning that some jurisdictions may have laws that limit or prohibit such waivers. Franchisees should consult with a legal professional to understand the specific implications of this waiver in their state or region. This type of waiver is relatively common in franchise agreements, as franchisors often seek to limit their potential liability and maintain predictability in their financial obligations.