Are claims for damages by injunction expressly waived by the Extreme Art Studio franchisee?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
ly members. Therefore, you agree that you will be presumed to have
violated the terms of this Agreement if any member of your immediate family: (i) engages in any Prohibited Activities during any period of time during which you are prohibited from engaging in the Prohibited Activities; or (ii) uses or discloses the Know-how. However, you may rebut this presumption by furnishing evidence conclusively showing that you did not disclose the Know-how to the family member.
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- Covenants Reasonable. You acknowledge and agree that: (i) the terms of this Agreement are reasonable both in time and in scope of geographic area; and (ii) you have sufficient resources and business experience and opportunities to earn an adequate living while complying with the terms of this Agreement. YOU HEREBY WAIVE ANY RIGHT TO CHALLENGE THE TERMS OF THIS AGREEMENT AS BEING OVERLY BROAD, UNREASONABLE, OR OTHERWISE UNENFORCEABLE.
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- Breach. You agree that failure to comply with the terms of this Agreement will cause substantial and irreparable damage to us and/or other Extreme Art franchisees for which there is no adequate remedy at law. Therefore, you agree that any violation of the terms of this Agreement will entitle us to injunctive relief. You agree that we may apply for such injunctive relief without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of yours in the event of the entry of such injunction will be the dissolution of such injunction, if warranted, upon hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If a court requires the filing of a bond notwithstanding the preceding sentence, the parties agree that the amount of the
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to the 2024 Extreme Art Studio Franchise Disclosure Document, franchisees expressly waive claims for damages resulting from the issuance of an injunction. Specifically, the franchisee agrees that any violation of the System Protection Agreement will cause substantial and irreparable damage to Extreme Art Studio and/or other Extreme Art franchisees.
The franchisee agrees that Extreme Art Studio may seek injunctive relief without bond (though upon due notice), in addition to other relief available at equity or law. The franchisee's sole remedy, in the event such an injunction is entered, will be the dissolution of the injunction if warranted upon a hearing. The franchisee expressly waives all claims for damages by reason of the wrongful issuance of any such injunction.
This waiver means that if Extreme Art Studio seeks and obtains an injunction against a franchisee for violating the System Protection Agreement, the franchisee cannot sue Extreme Art Studio for damages, even if the injunction is later found to have been wrongfully issued. However, the franchisee can seek to dissolve the injunction. If a court requires a bond for the injunctive relief, the parties agree that the bond will not exceed $1,000.
This type of waiver is not uncommon in franchise agreements, as it aims to protect the franchisor from potentially large damage claims in cases where they seek to enforce the agreement through injunctive relief. Prospective Extreme Art Studio franchisees should understand this waiver and its implications before signing the franchise agreement.