In the event of a dispute with Cool Binz, is a franchisee's recovery limited to actual damages?

According to Cool Binz's 2025 Franchise Disclosure Document, a franchisee's potential recovery in a dispute may be limited to actual damages. Specifically, the FDD states that the franchisee waives any right to claim punitive, exemplary, incidental, indirect, special, or consequential damages, including lost profits. This waiver applies to any cause of action, whether based in contract, negligence, strict liability, or other tort.

This means that if a Cool Binz franchisee has a dispute with the franchisor, the franchisee can only recover direct financial losses they have incurred. They cannot seek additional compensation for things like lost business opportunities, reputational damage, or other indirect losses. This limitation on recovery is a significant factor for prospective franchisees to consider, as it could impact their ability to be fully compensated in the event of a dispute with Cool Binz.

It is important to note that this limitation on damages is "to the fullest extent permitted by law," which suggests there may be some legal limitations on the enforceability of this waiver. However, franchisees should assume that the waiver will be enforced and that their recovery will be limited to actual damages. This type of clause is relatively common in franchise agreements, as franchisors seek to limit their potential liability. Prospective franchisees should consult with an attorney to fully understand the implications of this waiver and to assess their legal rights and options in the event of a dispute with Cool Binz.