Can the arbitrator assess punitive or exemplary damages in a Kitchen Solvers arbitration?
Kitchen_Solvers Franchise · 2025 FDDAnswer from 2025 FDD Document
The decision of the arbitrator will be final and binding on all parties to the dispute; however, the arbitrator may not under any circumstances: (1) stay the effectiveness of any pending termination of this Agreement; (2) assess punitive or exemplary damages; (3) certify a class or a consolidated action; or (4) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set.
9.1.6 Damage Waiver.
The parties hereto and each of them EXPRESSLY WAIVE(S) ANY CLAIM FOR PUNITIVE, MULTIPLE AND/OR EXEMPLARY DAMAGES; except that this waiver and limitation shall not apply with respect to (a) your obligation to indemnify us pursuant to any provision of this Agreement, or (b) any claims we bring against you and/or your guarantors and/or your owners for unauthorized use of the Marks, unauthorized use or disclosure of any Confidential Information, unfair competition, breach of your confidentiality or non-competition covenants under this Agreement, and/or any cause of action under the Lanham Act, and we shall be entitled to receive an award of multiple damages, attorneys' fees and all damages as provided by law.
- 9.1.7 The parties hereto and each of them EXPRESSLY AGREE(S) THAT IN THE EVENT OF ANY FINAL DETERMINATION, ADJUDICATION OR APPLICABLE ENACTMENT OF LAW THAT PUNITIVE, MULTIPLE AND/OR EXEMPLARY DAMAGES MAY NOT BE WAIVED, ANY RECOVERY BY ANY PARTY IN ANY ARBITRATION OR OTHER FORUM SHALL NEVER EXCEED TWO (2) TIMES ACTUAL DAMAGES, except that we may recover more than two (2) times its actual damages if you commit acts of willful trademark infringement or otherwise violate the Lanham Act, as provided by law.
The Franchise Agreement includes a waiver of exemplary and punitive damages. That requirement will not apply to North Dakota franchisees and is deemed deleted in each place it appears in the Disclosure Document and Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 49–190)
What This Means (2025 FDD)
According to Kitchen Solvers' 2025 Franchise Disclosure Document, the arbitrator generally cannot assess punitive or exemplary damages. Section 8.2.3 of the Franchise Agreement states that the arbitrator may not, under any circumstances, assess punitive or exemplary damages.
However, there are exceptions to this rule. Section 9.1.6 outlines a damage waiver where both parties expressly waive any claim for punitive, multiple, and/or exemplary damages. This waiver does not apply to Kitchen Solvers if the franchisee is found to have unauthorizedly used the Marks or Confidential Information, engaged in unfair competition, breached confidentiality or non-competition covenants, or violated the Lanham Act. In these specific cases, Kitchen Solvers is entitled to receive an award of multiple damages, attorneys' fees, and all damages as provided by law.
Furthermore, Section 9.1.7 states that if a final determination or applicable law prevents the waiver of punitive, multiple, and/or exemplary damages, any recovery by any party in arbitration or another forum shall never exceed two times actual damages. An exception exists where Kitchen Solvers may recover more than two times its actual damages if the franchisee commits acts of willful trademark infringement or otherwise violates the Lanham Act, as provided by law.
It is also important to note that for franchisees in North Dakota, the Franchise Agreement includes a waiver of exemplary and punitive damages, but that requirement will not apply to North Dakota franchisees and is deemed deleted in each place it appears in the Disclosure Document and Franchise Agreement.