In the Cream franchise agreement, what specific rights are waived regarding punitive or exemplary damages in arbitration?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator has the right to award or include in his or her awards any relief which he or she deems proper, including money damages, pre- and post-award interest, interim costs and attorneys' fees, specific performance, and injunctive relief, provided that the arbitrator may not declare any of the trademarks owned by us or our affiliates generic or otherwise invalid, or award any punitive or exemplary damages against any party to the arbitration proceeding (we and you hereby waiving to the fullest extent permitted by law any such right to or claim for any punitive or exemplary damages against any party to the arbitration proceeding). In any arbitration brought pursuant to this Section, and in any action in which a party seeks to enforce compliance with this Section, the prevailing party shall be awarded its costs and expenses, including attorneys' fees, incurred in connection therewith.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, both Cream and the franchisee waive the right to claim punitive or exemplary damages against each other in arbitration proceedings. The arbitrator is authorized to grant various forms of relief, including monetary damages, interest, specific performance, and injunctive relief. However, the arbitrator cannot declare Cream's trademarks generic or invalid, nor can they award punitive or exemplary damages to either party. This waiver is applicable to the fullest extent permitted by law. This means that in any dispute resolution via arbitration, franchisees are limited to recovering actual damages and equitable relief, preventing them from seeking additional financial penalties intended to punish the other party. This mutual waiver aims to limit potential financial exposure in case of disputes and encourages resolution based on actual losses rather than punitive measures.