Are there any exceptions to the Dog Haus Area Developer's waiver of punitive damages?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
Area Developer hereby 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) against Franchisor arising out of any cause whatsoever (whether such cause be based in contract, negligence, strict liability, other tort or otherwise) and agrees that in the event of a dispute, that Area Developer's recovery is limited to actual damages.
Except for any damages or losses incurred by Franchisor as a result of or arising out of any of Area Developer's (i) breach of its non-compete or confidentiality obligations under the Franchise Agreement, (ii) misuse or breach of its obligations under the Franchise Agreement as it relates to or arises out of the Marks or the System, (iii) fraud or willful misconduct, or (iv) any other illegal conduct or bad faith actions, Franchisor hereby waives to the fullest extent permitted by law, any right to claim for any punitive damages (and only punitive damages) against Area Developer arising out of any cause whatsoever (whether such cause be based in contract, negligence, strict liability, other tort or otherwise).
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, both the Area Developer and Dog Haus waive the right to claim punitive damages against each other in the event of a dispute. However, there are specific exceptions to Dog Haus's waiver.
Dog Haus retains the right to claim punitive damages from the Area Developer under certain circumstances. These circumstances include the Area Developer's breach of non-compete or confidentiality obligations, misuse or breach of obligations related to the Dog Haus Marks or System, fraud or willful misconduct, or any other illegal conduct or bad faith actions.
This means that while the Area Developer generally cannot seek punitive damages from Dog Haus, Dog Haus can pursue such damages from the Area Developer if the Area Developer engages in specific detrimental behaviors outlined in the franchise agreement. This clause aims to protect Dog Haus's brand, system, and reputation, while also setting clear boundaries for the Area Developer's conduct.