Does the Clear Pest Pros franchise agreement include a waiver of punitive damages?
Clear_Pest_Pros Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
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- Waiver of Punitive Damages. You waive to the fullest extent permitted by law, any right to or claim for any punitive, exemplary, incidental, indirect, special or consequential damages (including, without limitation, lost profits) that you may have against us arising out of any cause whatsoever (whether such cause be based in contract, negligence, strict liability, other tort or otherwise) and agree that in the event of a dispute, your recovery will be limited to actual damages.
[Item 22: CONTRACTS]
6. WAIVER OF EXEMPLARY AND PUNITIVE DAMAGES AND JURY TRIAL.
To the extent required by the North Dakota Franchise Investment Law, the following language is deleted from Section 15.I. of the Franchise Agreement.
"You hereby waive to the fullest extent permitted by law, any right to or claim for any punitive, exemplary, incidental, indirect, special or consequential damages (including, without limitation, lost profits) against us arising out of any cause whatsoever (whether such cause be based in contract, negligence, strict liability, other tort or otherwise) and agree that in the event of a dispute, that your recovery is limited to actual damages."
[Item 22: CONTRACTS]
Waiver of Punitive Damages and Jury Trial. The following is added to Section 15.I, of the Agreement:
Minn. Rule 2860.4400J. prohibits the waiver of a jury trial.
Source: Item 22 — CONTRACTS (FDD pages 67–68)
What This Means (2025 FDD)
According to the 2025 Clear Pest Pros Franchise Disclosure Document, the franchise agreement initially includes a waiver of punitive damages. Specifically, franchisees waive their rights to claim punitive, exemplary, incidental, indirect, special, or consequential damages against Clear Pest Pros. This waiver limits the franchisee's recovery in a dispute to actual damages only, regardless of the cause of action.
However, this waiver is not absolute. An addendum to the franchise agreement for use in North Dakota states that the waiver of exemplary and punitive damages is deleted from Section 15.I of the Franchise Agreement to the extent required by the North Dakota Franchise Investment Law. This means that franchisees operating in North Dakota may have the right to seek punitive damages in certain situations, as determined by North Dakota law.
Furthermore, for franchises governed by Minnesota law, Minnesota Rule 2860.4400J prohibits the waiver of a jury trial. While this doesn't directly address punitive damages, it indicates that certain legal rights cannot be waived in Minnesota, suggesting potential limitations on the enforceability of the punitive damages waiver in that state. Therefore, prospective franchisees should be aware of the specific state laws governing their franchise agreement and consult with legal counsel to understand their rights and limitations regarding punitive damages.