Does the Degree Wellness agreement allow for recovery of indirect, special, consequential, or punitive damages?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Waiver of Punitive Damages.
Developer waives to the fullest extent permitted by law, any right to or claim for any punitive, exemplary, incidental, indirect, special or consequential damages (including, without limitation, lost profits) which Developer may have against Franchisor 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, Developer's recovery will be limited to actual damages.
If any other term of this Agreement is found or determined to be unconscionable or unenforceable for any reason, the foregoing provisions will continue in full force and effect, including, without limitation, the waiver of any right to claim any consequential damages.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, the agreement includes a waiver of certain damages. Specifically, the franchisee (referred to as 'Developer' in the quote) waives the right to claim punitive, exemplary, incidental, indirect, special, or consequential damages against Degree Wellness. This waiver extends to any cause of action, whether based in contract, negligence, strict liability, tort, or otherwise.
This means that if a dispute arises between the franchisee and Degree Wellness, the franchisee's recovery will be limited to actual damages. The waiver explicitly includes lost profits as an example of consequential damages that cannot be claimed. Even if any other term of the agreement is found to be unenforceable, the waiver of consequential damages remains in effect.
This type of waiver is relatively common in franchise agreements. It aims to limit the franchisor's potential liability and provide more predictable risk management. However, it places a greater burden on the franchisee to assess potential risks and protect their interests through other means, such as insurance and careful business planning. A prospective Degree Wellness franchisee should carefully consider the implications of this waiver and seek legal advice to understand their rights and obligations fully.