In the event of a dispute, what is the limit to the damages that a Fly Fitness developer can recover?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.7 Waiver of Certain Damages.
Developer hereby waives, to the fullest extent permitted by law, any right to or claim for any punitive, exemplary, incidental, indirect, special, consequential, or other damages (including, without limitation, loss of profits) against Franchisor, its affiliates, and their respective officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees, in their corporate and individual capacities, arising out of any cause whatsoever.
Each of
- Developer agrees that in the event of a dispute, Developer shall be limited to the recovery of any actual damages sustained.
- 10.8 Limitations of Claims. Any and all claims by Developer arising out of or relating to this Agreement or the relationship among the parties will be barred unless a proceeding for relief is commenced within one (1) year from the date on which Developer knew or should have known of the facts giving rise to such claims.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, a developer's potential recovery in a dispute is limited to actual damages sustained. This means that Fly Fitness developers waive the right to claim punitive, exemplary, incidental, indirect, special, consequential, or other damages, including lost profits, from Fly Fitness, its affiliates, and their respective personnel.
This waiver has significant implications for prospective Fly Fitness developers. It means that if a dispute arises, the developer can only recover direct financial losses they've incurred. They cannot seek additional compensation for things like lost business opportunities, reputational damage, or other indirect impacts. This limitation of liability is designed to protect Fly Fitness from potentially large and unpredictable damage claims.
Such waivers of certain types of damages are relatively common in franchise agreements. Franchisors often seek to limit their financial exposure in disputes, and franchisees need to be aware of these limitations. The FDD also states that any claims by the developer must be commenced within one year from the date on which the developer knew or should have known of the facts giving rise to such claims.
Prospective Fly Fitness developers should carefully consider this limitation of damages and consult with legal counsel to understand the full implications before signing the agreement. Understanding the types of damages that are waived and the time limit for bringing claims is crucial for assessing the potential risks and rewards of investing in a Fly Fitness franchise.