In a dispute with Gold Star, can a franchisee claim punitive damages?

According to Gold Star's 2025 Franchise Disclosure Document, franchisees are limited in the types of damages they can claim in a dispute with the company. Specifically, the franchise agreement states that both Gold Star and the franchisee waive the right to claim multiple, punitive, or exemplary damages against each other. This means that in the event of a dispute, a franchisee can only recover the actual damages they have sustained.

This waiver of punitive damages is a significant point for prospective franchisees to consider. Punitive damages are intended to punish a party for egregious behavior and deter similar conduct in the future. By agreeing to waive these damages, franchisees are giving up the potential for a larger monetary award in certain types of disputes, limiting their recovery to only the direct financial losses they have incurred.

The agreement emphasizes that each party will be limited to the recovery of actual damages sustained. This provision aims to ensure that disputes are resolved based on the concrete financial harm suffered, rather than the potential for a larger, punitive payout. Franchisees should carefully evaluate this clause and understand its implications for their potential legal recourse against Gold Star.