Does the waiver of punitive damages for Clean Your Dirty Face extend to the owners of the franchise?

According to Clean Your Dirty Face's 2025 Franchise Disclosure Document, the waiver of punitive damages extends to the owners of the franchise. Specifically, Clean Your Dirty Face and the franchisee (including the franchisee's owners) waive any right to claim punitive, exemplary, or multiple damages against each other. This means that in the event of a dispute, both Clean Your Dirty Face and the franchisee are limited to equitable relief and recovery of actual damages sustained, unless federal law provides otherwise. An exception to this waiver exists for the franchisee's obligation to indemnify Clean Your Dirty Face for third-party claims.

This waiver has significant implications for prospective Clean Your Dirty Face franchisees. It limits the potential financial recovery in case of disputes with the franchisor, preventing franchisees from seeking punitive damages, which are intended to punish the wrongdoer rather than compensate for actual losses. Franchisees are instead limited to recovering only the direct financial losses they can prove.

However, there is an exception: punitive damages available to either party under federal law are not waived. Also, the franchisee still has the obligation to indemnify Clean Your Dirty Face for third-party claims under Section 16.D of the franchise agreement. This means that if a third party sues Clean Your Dirty Face due to something the franchisee did, the franchisee may have to cover Clean Your Dirty Face's losses, including punitive damages if awarded.

Such waivers are relatively common in franchise agreements. Prospective franchisees should carefully consider the implications of this provision and consult with legal counsel to understand their rights and potential liabilities before investing in a Clean Your Dirty Face franchise.