What damages are Moes Southwest Grill or the customer NOT liable for under the agreement?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.5 IN NO EVENT WILL EITHER PARTY, OR ANY AFFILIATES OR SUBSIDIARIES OR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS, MEMBERS OR REPRESENTATIVES BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY FOR SPECIAL, INDIRECT, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOSS OF ANY NATURE, INCLUDING, BUT NOT LIMITED TO, DAMAGES RESULTING FROM DELAY OR LOSS OF GOODWILL THAT MAY ARISE IN CONNECTION WITH THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING, AND WHETHER SUCH LIABILITY IS BASED ON CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE. THE PARTIES AGREE THAT THIS LIMITATION OF LIABILITY SHALL SURVIVE IN FULL FORCE AND EFFECT DESPITE ANY FAILURE OF ANY EXCLUSIVE REMEDY (COLLECTIVELY, "SPECIAL DAMAGES"). THIS PROVISION SHALL APPLY TO THE DISPENSING EQUIPMENT LEASE AND COCA-COLA FREESTYLE AGREEMENT ATTACHED TO THE AGREEMENT AS EXHIBIT 5.
- 1.6 The parties acknowledge that either party may pursue other remedies or direct
damages (but not Special Damages) if the other party breaches the terms of the Agreement. The prevailing party shall be entitled to all costs and expenses incurred to collect the amounts due including without limitation reasonable attorneys' fees.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, under the Coca-Cola Company Moe's Franchisee Participation Agreement, neither Moe's Southwest Grill nor the customer is liable to the other or any third party for special, indirect, punitive, incidental, or consequential damages or loss of any nature. This includes damages resulting from delay or loss of goodwill that may arise in connection with the agreement. This limitation applies even if the party was aware of the possibility of such damages and regardless of whether the liability is based on contract, tort, negligence, strict liability, or other grounds.
This limitation of liability extends to the Dispensing Equipment Lease and Coca-Cola Freestyle Agreement attached as Exhibit 5. However, either party can pursue other remedies or direct damages (excluding special damages) if the other breaches the agreement. The prevailing party is entitled to all costs and expenses incurred to collect amounts due, including reasonable attorneys' fees.
This means that as a Moe's Southwest Grill franchisee, your potential recovery for damages from the franchisor or Coca-Cola, or their recovery from you, is limited to direct damages. You cannot claim for lost profits, reputational damage, or other indirect losses. This is a fairly standard clause in franchise agreements, designed to limit the financial exposure of both parties to reasonably foreseeable direct losses. However, it is important to understand that this limitation could significantly impact your ability to recover losses in certain situations.