What is the limitation on damages that either party can recover in the event of a dispute related to the Crave franchise agreement?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
19.10 Waiver of Punitive Damages; Waiver of Jury Trial
You, the Principals and we hereby waive, to the fullest extent permitted by law, any right to or claim or any punitive, exemplary, incidental, indirect, special, consequential or other damages (including, without limitation, loss of profits) against either party, their officers, directors, shareholders, partners, agents, representatives, independent contractors, servants and employees, in their corporate and individual capacities, 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, either party shall be limited to the recovery of any actual damages sustained by it. If any other term of this Agreement is found or determined to be unconscionable or unenforceable for any reason, the foregoing provisions of waiver by agreement of punitive, exemplary, incidental, indirect, special, consequential or other damages (including, without limitation, loss of profits) shall continue in full force and effect.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, both Crave and the franchisee waive the right to claim punitive, exemplary, incidental, indirect, special, consequential, or other damages, including loss of profits. This waiver applies to claims against either party, including their officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees, in both their corporate and individual capacities. The waiver covers any cause of action, whether based in contract, negligence, strict liability, tort, or otherwise.
In the event of a dispute, both Crave and the franchisee are limited to recovering only the actual damages they sustained. This means that neither party can seek additional compensation beyond the direct financial losses they incurred as a result of the dispute. This limitation remains in effect even if any other term of the Franchise Agreement is found to be unconscionable or unenforceable.
This type of clause is relatively common in franchise agreements. It aims to limit the financial exposure of both parties in case of a dispute. By waiving the right to seek these types of damages, both Crave and the franchisee agree to focus on recovering direct losses rather than pursuing potentially larger, but less certain, claims for damages like lost profits or punitive damages. Prospective franchisees should carefully consider the implications of this waiver, as it could limit their potential recovery in the event of a significant dispute with the franchisor.