Can the arbitrator award punitive or exemplary damages against any party in a Cream arbitration?

According to Cream's 2025 Franchise Disclosure Document, the arbitrator in any arbitration proceeding is not allowed to award punitive or exemplary damages against any party. Both Cream and the franchisee waive their rights to claim such damages to the fullest extent permitted by law. This means that in the event of a dispute that goes to arbitration, the arbitrator's ability to provide financial relief is limited to actual damages, costs, and fees.

This waiver of punitive or exemplary damages is a significant factor for prospective Cream franchisees to consider. Punitive damages are intended to punish a party for egregious behavior and deter similar conduct in the future, while exemplary damages are awarded to set an example. By waiving the right to seek these types of damages, franchisees are agreeing to limit their potential recovery to direct losses and expenses. This could be a disadvantage if Cream engages in misconduct that causes substantial harm but does not result in significant direct financial losses.

However, the FDD also states that the arbitrator has the right to award relief deemed proper, including money damages, pre- and post-award interest, interim costs, attorneys' fees, specific performance, and injunctive relief. This ensures that franchisees can still seek compensation for actual losses and legal expenses, as well as orders requiring Cream to take specific actions or refrain from certain conduct. Prospective franchisees should carefully weigh the implications of waiving punitive and exemplary damages against the potential benefits of arbitration, such as a faster and less expensive resolution of disputes compared to litigation.