Under what circumstances can a City Wide franchisee seek treble damages?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
IN NO EVENT SHALL CITY WIDE OR ANY OF ITS SUPPLIERS HAVE ANY LIABILITY TO FRANCHISEE OR ANY OTHER PERSON HEREUNDER FOR CONSEQUENTIAL, PUNITIVE, SPECIAL OR INCIDENTAL DAMAGES OF ANY KIND WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION OR ANY OTHER PECUNIARY LOSS) RELATED TO THIS AGREEMENT OR RESULTING FROM FRANCHISEE'S USE OR INABILITY TO USE THE TECHNOLOGY SYSTEM, ARISING FROM ANY CAUSE OF ACTION WHATSOEVER, INCLUDING CONTRACT, WARRANTY, STRICT LIABILITY, OR NEGLIGENCE (EVEN IF CITY WIDE HAS BEEN NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES). FRANCHISEE AGREES THAT IN NO EVENT SHALL CITY WIDE OR SUPPLIERS' LIABILITY HEREUNDER EXCEED THE AGGREGATE OF ALL AMOUNTS PAID TO CITY WIDE BY FRANCHISEE HEREUNDER.
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- Indemnification. Franchisee will indemnify, defend and hold harmless City Wide and its past, present and future officers, directors, agents, attorneys, employees, shareholders, successors, assigns and affiliates (collectively "City Wide Indemnities") from and against any and all expenses, damages, taxes, claims, suits, losses, actions, judgments, liabilities and costs, including City Wide Indemnities' reasonable attorney's fees and in-house counsel fees, arising out of or based on any claim, action, judicial proceeding, administrative proceeding, personal injury or damage to real or personal property brought or threatened in connection with City Wide's provision of IT Services, or otherwise related to or arising out of a Cyber Event. City Wide will indemnify and hold Franchisee and its employees or agents ("Franchisee Indemnities") harmless from and against any and all expenses, damages, claims, suits, losses, actions,
judgments, liabilities and costs, including Franchisee Indemnities' reasonable attorney's fees, arising out of or based on any claim, action, judicial proceeding, administrative proceeding, personal injury or damage to real or personal property brought or threatened as a result of any negligence or willful misconduct by City Wide. All such indemnification will survive termination or expiration of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
Based on the 2025 City Wide Franchise Disclosure Document, the circumstances under which a franchisee can seek treble damages are not explicitly detailed. The document outlines various limitations of liability for City Wide, stating that City Wide will not be liable for consequential, punitive, special, or incidental damages related to the franchise agreement or the franchisee's use of the technology system, even if City Wide has been notified of the possibility of such damages. The agreement also specifies that City Wide's liability will not exceed the aggregate of all amounts paid to City Wide by the franchisee.
However, the FDD does state that City Wide will indemnify and hold the franchisee harmless from expenses, damages, claims, suits, losses, actions, judgments, liabilities, and costs, including reasonable attorney's fees, arising from claims, actions, or proceedings related to personal injury or property damage caused by City Wide's negligence or willful misconduct. This suggests that while City Wide limits its liability for certain types of damages, it does accept responsibility for direct damages resulting from its own actions.
Since the FDD does not directly address the possibility of a City Wide franchisee seeking treble damages, a prospective franchisee should directly ask City Wide under which specific circumstances a franchisee could seek treble damages. Understanding the conditions under which such damages might be pursued is crucial for assessing the potential financial risks and liabilities associated with the franchise.