Does a Spray Net franchisee waive the right to claim punitive damages?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee hereby waives to the fullest extent permitted by law, any right to or claim for any punitive, exemplary, incidental, indirect, special or
consequential damages (including, without limitation, lost profits) against Franchisor arising out of any cause whatsoever (whether such cause be based in contract, negligence, strict liability, other tort or otherwise) and agrees that in the event of a dispute, that Franchisee's recovery is limited to actual damages. If any other term of this Agreement is found or determined to be unconscionable or unenforceable for any reason, the foregoing provisions shall continue in full force and effect, including, without limitation, the waiver of any right to claim any consequential damages. Nothing in this Section or any other provision of this Agreement shall be construed to prevent Franchisor from claiming and obtaining expectation or consequential damages, including lost future royalties for the balance of the term of this Agreement if it is terminated due to Franchisee's default, which the parties agree and acknowledge Franchisor may claim under this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, a franchisee waives the right to claim punitive damages. The franchisee agrees to waive any right to, or claim for, punitive, exemplary, incidental, indirect, special, or consequential damages against Spray Net. This waiver applies regardless of the cause of action, whether it's based on contract, negligence, strict liability, or other tort.
In the event of a dispute, the franchisee's recovery is limited to actual damages. However, this waiver does not prevent Spray Net from claiming and obtaining expectation or consequential damages, including lost future royalties, if the franchise agreement is terminated due to the franchisee's default.
It is important for a prospective Spray Net franchisee to understand that they are giving up the right to seek punitive damages in any dispute with the franchisor. They are limited to recovering only their actual, direct losses. This could significantly impact the potential financial recovery in case of a serious disagreement or breach of contract by Spray Net. Franchisees should consider the implications of this waiver and consult with legal counsel before signing the agreement.