Can the arbitrator assess punitive damages in a Kitchen Solvers arbitration?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
s of other parties. The arbitrator must follow the law and not disregard the terms of this Agreement. The arbitration will be conducted by one (1) arbitrator who must have at least 5 years' experience in franchising or in franchise law.
The decision of the arbitrator will be final and binding on all parties to the dispute; however, the arbitrator may not under any circumstances: (i) stay the effectiveness of any pending termination of this Agreement; (ii) assess punitive or exemplary damages; or (iii) make any award that extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance set by us. Judgment upon the award may be entered in any court having jurisdiction thereof.
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- Exceptions to Mediation/Arbitration.
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
According to Kitchen Solvers's 2025 Franchise Disclosure Document, the arbitrator generally cannot assess punitive or exemplary damages. However, this restriction does not apply to franchisees in North Dakota, where a waiver of punitive damages is considered unenforceable.
For prospective Kitchen Solvers franchisees, this means that in most cases, if a dispute goes to arbitration, the arbitrator is specifically prohibited from awarding punitive damages against either party. Punitive damages are intended to punish a party for egregious misconduct, and their absence in arbitration could limit the potential financial recovery in certain disputes.
However, franchisees operating in North Dakota have different rights. The addendum for North Dakota states that the franchise agreement's waiver of punitive damages is not enforceable. This ensures that North Dakota franchisees retain the right to seek punitive damages in arbitration, aligning with the protections provided by the North Dakota Franchise Investment Law. This difference highlights the importance of understanding the specific addenda applicable to your state when evaluating the franchise agreement.