Under what circumstances is City Wide not liable for consequential, punitive, special, or incidental damages to the franchisee?

According to City Wide's 2025 Franchise Disclosure Document, City Wide is not liable to the franchisee for consequential, punitive, special, or incidental damages under certain conditions. Specifically, City Wide is not liable for these types of damages related to the franchise agreement or resulting from the franchisee's use or inability to use the technology system. This protection applies regardless of the cause of action, including contract, warranty, strict liability, or negligence, even if City Wide was aware of the potential for such damages. This limitation of liability is a significant aspect of the franchise agreement that franchisees should carefully consider.

This means that if a City Wide franchisee experiences losses such as lost business profits, business interruption, loss of business information, or any other financial loss as a result of issues with the technology system or the agreement itself, they will not be able to recover consequential, punitive, special, or incidental damages from City Wide. The franchisee assumes the risk for these types of losses. However, City Wide's liability is capped at the aggregate of all amounts paid to City Wide by the franchisee under the agreement.

This type of limitation of liability is relatively common in franchise agreements. It is designed to protect the franchisor from potentially large and unpredictable damage claims. Prospective City Wide franchisees should understand the implications of this provision and may want to seek legal advice to fully assess their potential exposure to these types of losses. Franchisees should also consider whether to obtain their own insurance coverage to protect against such risks.