Does the Degree Wellness developer waive the right to claim punitive damages?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Degree Wellness's 2025 Franchise Disclosure Document, the developer does waive the right to claim punitive damages. Specifically, the developer waives any right to claim punitive, exemplary, incidental, indirect, special, or consequential damages against Degree Wellness. This waiver applies regardless of the cause of action, whether it's based on contract, negligence, strict liability, or other tort.
This means that in the event of a dispute, the developer's recovery will be limited to actual damages. The waiver of the right to claim consequential damages remains in effect even if any other term of the agreement is found to be unconscionable or unenforceable. This provision is designed to protect Degree Wellness from potentially large damage claims beyond the direct financial losses incurred by the developer.
This type of waiver is relatively common in franchise agreements. It aims to provide the franchisor with a degree of financial predictability and limit their exposure to potentially large and unpredictable damage awards. Prospective Degree Wellness developers should carefully consider the implications of this waiver, as it could significantly limit their ability to recover damages in the event of a dispute with the franchisor.