Does the waiver of punitive damages apply to both parties in the Christian Brothers Automotive agreement?

According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, both parties, the franchisee and the franchisor, are restricted from seeking punitive damages in disputes. The document states that the arbitrator cannot award damages exceeding compensatory damages. This means that neither party can claim or receive damages intended to punish the other party beyond the actual losses incurred.

This waiver of punitive damages is part of the dispute resolution agreement, which mandates binding arbitration for resolving disputes. By agreeing to this, franchisees give up the right to sue Christian Brothers Automotive for punitive damages in court. This can be a significant consideration for prospective franchisees, as it limits the potential financial recovery in case of a dispute, but also protects the franchisee from the same risk.

The inclusion of such a clause is relatively common in franchise agreements, as franchisors often seek to manage and limit their potential liabilities. Franchisees should carefully consider the implications of waiving the right to seek punitive damages and how it might affect their ability to be fully compensated in certain dispute scenarios. It is advisable to seek legal counsel to fully understand the ramifications of this clause before entering into the franchise agreement with Christian Brothers Automotive.