When is a waiver of exemplary, punitive, or similar damages by a Cinnaholic franchisee considered void?

According to the 2025 Cinnaholic Franchise Disclosure Document, a waiver of exemplary, punitive, or similar damages by a franchisee is generally considered void. However, there's an exception: such waivers are valid if executed as part of a negotiated settlement after the franchise agreement is already in effect. For this exception to apply, both Cinnaholic and the franchisee must be represented by independent legal counsel during the settlement negotiations, as stipulated by RCW 19.100.220(2). This statute is part of Washington state law.

This provision aims to protect franchisees from being forced to give up their rights to seek certain types of damages unless they do so knowingly and with the benefit of legal advice. Exemplary or punitive damages are typically awarded to punish a defendant for particularly egregious behavior, going beyond simply compensating the plaintiff for their losses.

For a prospective Cinnaholic franchisee, this means that any clause in the franchise agreement requiring them to waive the right to seek exemplary or punitive damages is unenforceable unless the specific conditions are met. This ensures that franchisees retain the ability to pursue such damages in cases of serious misconduct by Cinnaholic, while also allowing for flexibility in resolving disputes through negotiated settlements. Franchisees should ensure they seek independent legal counsel before signing any document that includes waiving rights to damages.