In the event of a dispute between Cajun and a Churchs Chicken franchisee, what right have the parties waived?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. FRANCHISEE AND CAJUN WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT OR CLAIM OF ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST EACH OTHER AND AGREE THAT, IN THE EVENT OF A DISPUTE BETWEEN THEM, EACH SHALL BE LIMITED TO THE RECOVERY OF ACTUAL DAMAGES SUSTAINED BY IT, AND FRANCHISEE AGREES THAT MONETARY DAMAGES PAYABLE BY CAJUN TO FRANCHISEE WITH RESPECT TO ANY LEGAL ACTION BETWEEN THEM (WHETHER THERE BE A SINGLE CLAIM OR MULTIPLE CLAIMS BY FRANCHISEE) SHALL NOT EXCEED THE AMOUNT OF ROYALTIES PAID BY FRANCHISEE TO CAJUN IN THE TWO YEARS PRIOR TO THE DATE THE PARTIES COMMENCED LEGAL ACTION.
FRANCHISEE AND CAJUN WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO BRING, OR BE A CLASS MEMBER IN, ANY CLASS ACTION SUITS AND THE RIGHT TO TRIAL BY JURY.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, both the franchisee and Cajun (the franchisor) waive certain rights in the event of a dispute. Specifically, they waive, to the fullest extent permitted by law, any right or claim to punitive or exemplary damages against each other. This means that neither party can seek damages intended to punish the other party beyond compensating for actual losses.
Furthermore, the agreement limits the franchisee's potential monetary recovery from Cajun to the amount of royalties paid by the franchisee to Cajun in the two years prior to the commencement of legal action. This cap on damages could significantly limit a franchisee's ability to recover losses, especially if the damages exceed the royalty payments made during that two-year period.
In addition to waiving rights to certain types of damages and limiting potential monetary recovery, both the franchisee and Cajun also waive the right to bring or participate in any class action suits against each other. They also waive their right to a trial by jury. This means that any disputes will be resolved by a judge rather than a jury of their peers. These waivers are intended to streamline dispute resolution and potentially reduce litigation costs, but they also limit the franchisee's legal options in case of a disagreement with Churchs Chicken.