Under what circumstances does the waiver of punitive or exemplary damages NOT apply to Jersey Mikes developers?
Jersey_Mikes Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.8 EXCEPT FOR DEVELOPER'S OBLIGATION TO INDEMNIFY FRANCHISOR FOR THIRD PARTY CLAIMS UNDER SECTION 11.3 OR FOR CLAIMS FOR TREBLE DAMAGES IN APPROPRIATE CASES UNDER THE U.S. TRADEMARK ACT OF 1946 (LANHAM ACT, 15 U.S.C. §1051 AND THE S ECTIONS FOLLOWING IT), FRANCHISOR AND DEVE LOPER (AND DEVELOPER'S OWNERS) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE OR EXEMPLARY DAMAGES AGAINST THE OTHER AND AGREE THAT, IN THE EVENT OF A DI SPUTE BETWEEN THE PARTIES, THE PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVER Y OF ANY ACTUAL DAMAGES IT SUSTAINS.
Source: Item 22 — CONTRACTS (FDD page 77)
What This Means (2025 FDD)
According to Jersey Mikes' 2025 Franchise Disclosure Document, the waiver of punitive or exemplary damages between Jersey Mike's and its developers does not apply in two specific instances. This waiver generally means that both parties agree to forego claims for punitive damages, limiting themselves to actual damages and equitable relief in case of a dispute.
However, the waiver does not extend to the developer's obligation to indemnify Jersey Mike's for third-party claims as outlined in Section 11.3 of the agreement. This means if Jersey Mike's incurs costs or damages due to a claim brought by someone else related to the developer's actions, the developer is still responsible for covering those costs, potentially including punitive damages if awarded to the third party.
Additionally, the waiver does not apply to claims for treble damages in cases appropriate under the U.S. Trademark Act of 1946 (Lanham Act). Treble damages, which can be up to three times the actual damages, may be pursued by Jersey Mike's against a developer for trademark infringement or related violations under federal law. This exception underscores the importance Jersey Mike's places on protecting its trademarks and brand identity, and it serves as a strong deterrent against any actions that could harm the brand's reputation or value.