When are provisions requiring Cinnaholic franchisees to waive exemplary or punitive damages considered void?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Accordingly, provisions contained in the franchise agreement or elsewhere requiring franchisees to waive exemplary, punitive, or similar damages are void, except when executed pursuant to a negotiated settlement after the agreement is in effect and where the parties are represented by independent counsel, in accordance with RCW 19.100.220(2).
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, provisions in the franchise agreement that require franchisees to waive exemplary, punitive, or similar damages are generally considered void. However, there is an exception to this rule. Such waivers are permissible and not void if they are executed as part of a negotiated settlement after the franchise agreement is already in effect.
This exception has a further condition: both Cinnaholic and the franchisee must be represented by independent legal counsel during the negotiation of the settlement. This requirement ensures that the franchisee's rights are protected and that the waiver is entered into knowingly and voluntarily.
This clause is based on Washington state law (RCW 19.100.220(2) and RCW 19.100.190), reflecting the state's specific franchise regulations. Prospective franchisees should be aware of this provision, particularly if they anticipate needing to negotiate settlements with Cinnaholic at any point during the franchise term. It is crucial to seek independent legal counsel to ensure any waiver of damages is enforceable and protects their interests.