Under what circumstances does a Cicis franchisee waive the right to punitive damages against Cicis?

According to Cicis's 2025 Franchise Disclosure Document, a franchisee waives the right to claim punitive damages against Cicis and its affiliates under most circumstances. Specifically, the franchisee agrees to waive any right to punitive, exemplary, incidental, indirect, special, consequential, or other damages (including loss of profits). This waiver extends to Cicis, its affiliates, and their respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees, both in their corporate and individual capacities.

This waiver applies to any cause of action, whether based in contract, negligence, strict liability, other tort, or otherwise. In the event of a dispute, the franchisee's recovery is limited to actual damages sustained. This means that a franchisee can only recover the direct financial losses they incurred, and cannot seek additional compensation intended to punish Cicis for alleged misconduct.

However, there is an exception to this waiver. The franchisee does not waive their right to punitive damages with respect to any claims, controversies, or disputes for which the franchisee owes an indemnity under the agreement or otherwise. Indemnification typically involves compensating Cicis for losses or damages they incur as a result of the franchisee's actions or breaches of the agreement. The waiver of punitive damages remains in effect even if any other term of the agreement is found to be unconscionable or unenforceable.

This provision is significant for prospective franchisees as it limits their potential financial recovery in disputes with Cicis. Franchisees should carefully consider this waiver and consult with legal counsel to understand its implications fully. While such waivers are not uncommon in franchise agreements, the scope and specific exceptions can vary, so understanding the details is crucial.