Does the Desi District franchise agreement allow for the waiver of punitive damages?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
In the State of North Dakota only, this Disclosure Document is amended as follows:
THE SECURITIES COMMISSIONER HAS HELD THE FOLLOWING TO BE UNFAIR, UNJUST OR INEQUITABLE TO NORTH DAKOTA FRANCHISEES (NDCC SECTION 51-19-09):
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- Waiver of Exemplary and Punitive Damages: Requiring North Dakota Franchisees to consent to a waiver of exemplary and punitive damage.
2. Amendments. The Agreement (and any Guaranty Agreement) is amended to comply with the following:
- (7) Waiver of Exemplary and Punitive Damages: The parties do not waive exemplary and punitive damages.
Source: Item 23 — RECEIPTS (FDD pages 52–140)
What This Means (2024 FDD)
According to the 2024 Desi District Franchise Disclosure Document, the standard franchise agreement requires North Dakota franchisees to consent to a waiver of exemplary and punitive damages. However, the North Dakota Addendum explicitly amends the agreement to state that the parties do not waive exemplary and punitive damages. This means that franchisees in North Dakota are not required to waive their right to seek punitive damages.
This modification through the North Dakota Addendum protects Desi District franchisees in North Dakota, ensuring they retain the right to pursue exemplary and punitive damages in legal disputes, which can be significant in franchise-related litigation. This addendum addresses concerns raised by the North Dakota Securities Commissioner, who views such waivers as unfair, unjust, or inequitable.
For prospective Desi District franchisees, this highlights the importance of reviewing state-specific addenda or riders, as these can significantly alter the terms of the standard franchise agreement. Franchisees outside of North Dakota should be aware that their agreements may differ and could potentially include a waiver of exemplary and punitive damages, depending on their state's franchise laws.