Is there an exception to the waiver of punitive damages in the Sonesta Simply Suites franchise agreement?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- I.
Waiver of Punitive Damages, Jury Trial, and Class Action.
EXCEPT FOR YOUR OBLIGATION TO INDEMNIFY US FOR THIRD PARTY CLAIMS UNDER SECTION 15.D, WE AND YOU (AND YOUR 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 DISPUTE BETWEEN US AND YOU, THE PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS.
WE AND YOU IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING BROUGHT BY EITHER OF US.
WE AND YOU AGREE THAT ANY PROCEEDING WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND THAT ANY PROCEEDING BETWEEN US AND ANY OF OUR AFFILIATES, OR OUR AND THEIR RESPECTIVE OWNERS, OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES, ON THE ONE HAND, AND YOU (OR YOUR OWNERS, OFFICERS, DIRECTORS, AGENTS AND EMPLOYEES), ON THE OTHER HAND, MAY NOT BE: (I) CONDUCTED ON A CLASS-WIDE BASIS, (II) COMMENCED
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to the 2025 Sonesta Simply Suites Franchise Disclosure Document, both Sonesta Simply Suites and the franchisee waive the right to claim punitive or exemplary damages against each other. However, there is an exception: the franchisee's obligation to indemnify Sonesta Simply Suites for third-party claims under Section 15.D of the franchise agreement. This means that while neither party can generally seek punitive damages from the other, this waiver does not apply if Sonesta Simply Suites is facing claims from a third party and the franchisee is obligated to cover those claims. In such a case, the waiver of punitive damages would not be in effect.
This clause also specifies that in any dispute, the claiming party will be limited to equitable relief and recovery of actual damages sustained. This further clarifies that the focus is on compensating for direct losses rather than punishing the other party through punitive damages. The agreement also includes a mutual waiver of jury trials and class action lawsuits, ensuring that any proceedings will be conducted on an individual basis.
For a prospective Sonesta Simply Suites franchisee, this means that in most situations, they cannot seek punitive damages from the franchisor, and vice versa. However, it is crucial to understand the specific circumstances under which this waiver does not apply, particularly concerning third-party claims. Franchisees should carefully review Section 15.D of the franchise agreement to fully understand their indemnification obligations and the potential exceptions to the punitive damages waiver.