Are there any exceptions to the waiver of punitive damages in the Creative World School agreement?
Creative_World_School Franchise · 2025 FDDAnswer from 2025 FDD Document
- The following is added to the end of the "Summary" sections of Item 17(c), titled "Requirements for franchisee to renew or extend," and Item 17(m), entitled "Conditions for franchisor approval of transfer":
However, to the extent required by applicable law, all rights you enjoy and any causes of action arising in your favor from the provisions of Article 33 of the General Business Law of the State of New York and the regulations issued thereunder shall remain in force; it being the intent of this proviso that the non-waiver provisions of General Business Law Sections 687.4 and 687.5 be satisfied.
- The following language replaces the "Summary" section of Item 17(d), titled "Termination by franchisee":
You may terminate the agreement on any grounds available by law.
- The following is added to the end of the "Summary" section of Item 17(j), titled "Assignment of contract by franchisor":
However, no assignment will be made except to an assignee who in good faith and judgment of the franchisor, is willing and financially able to assume the franchisor's obligations under the Franchise Agreement.
- The following is added to the end of the "Summary" sections of Item 17(v), titled "Choice of forum", and Item 17(w), titled "Choice oflaw":
The foregoing choice of law should not be considered a waiver of any right conferred upon the franchisor or upon the franchisee by Article 33 of the General Business Law of the State of New York.
Source: Item 23 — RECEIPTS (FDD pages 80–247)
What This Means (2025 FDD)
Based on the 2025 Creative World School Franchise Disclosure Document, specific waivers and limitations are addressed in addenda for certain states. For instance, the New York addendum ensures that franchisees do not waive rights or causes of action under Article 33 of the General Business Law of the State of New York, satisfying the non-waiver provisions of General Business Law Sections 687.4 and 687.5. Similarly, in Maryland, general releases required for renewal, sale, or transfer do not apply to liabilities under the Maryland Franchise Registration and Disclosure Law.
The Illinois addendum stipulates that any condition within the agreement that attempts to waive compliance with the Illinois Act or any other Illinois law is void. Furthermore, questionnaires or acknowledgements signed by the franchisee cannot waive claims under state franchise law, including fraud in the inducement, or disclaim reliance on the franchisor.
These state-specific provisions indicate that while the standard Creative World School franchise agreement may contain certain waiver clauses, these are superseded by state laws designed to protect franchisees. Therefore, franchisees should carefully review the addendum specific to their state to understand the extent to which waivers are enforceable.