Does the one-year limitation on arbitration claims apply to 1 800 Packouts' claims for indemnification?
1_800_Packouts Franchise · 2025 FDDAnswer from 2025 FDD Document
unrelated franchisees (whether as a result of attempted consolidation, joinder, or otherwise). This is prudent from a business standpoint because (a) the mediation and arbitration procedures function most effectively on an individual case basis; (b) there are significant
factors present in each individual franchisee's situation which should be respected; and (c) class-wide or multiple plaintiff disputes do not foster quick, amicable, and economic dispute resolutions.
17.6 One Year Limitation of Action
- a. Except for an alleged violation of the Marks or any intellectual property licensed to you (which may be brought at any time), and except for the enforcement of our right to indemnification under Article 14 and subsection (c) just below, YOU AND WE ARE LIMITED TO BRINGING ANY ARBITRATION AGAINST THE OTHER WITHIN ONE YEAR OF THE DATE THAT THE FACTS WHICH GIVE RISE TO THE CLAIM WERE DISCOVERED, OR ONE YEAR FROM THE DATE THAT SUCH FACTS REASONABLY SHOULD HAVE BEEN DISCOVERED. The one-year period begins to run and will not be tolled merely because the claiming party was unaware of legal theories, statutes, regulations, or case law upon which the claim might be based. If the Parties have begun mediation on the day that the one-year expires, then the one-year will be extended by 90 days from the unsuccessful end of mediation within which a Party must bring arbitration. If arbitration is not brought by 5:00 p.m.
Source: Item 23 — RECEIPT (FDD pages 67–238)
What This Means (2025 FDD)
According to the 2025 FDD, the one-year limitation for bringing arbitration claims does not apply to 1 800 Packouts' claims for indemnification. Franchisees typically have a limited time to bring claims against the franchisor, but 1 800 Packouts provides an exception for indemnification claims. This means 1 800 Packouts has a longer period to pursue these specific claims.
Instead, 1 800 Packouts can bring indemnification actions within the period allowed by the limitation-of-action statute in the state where its headquarters is located. This could potentially extend the time frame for 1 800 Packouts to bring such claims significantly beyond the standard one-year limit applicable to other disputes.
For a prospective franchisee, this clause is favorable to the franchisor. It is important to understand the laws governing limitation of actions in the state where 1 800 Packouts' headquarters is located to fully grasp the potential duration 1 800 Packouts has to bring an indemnification claim. Franchisees should consult with a legal professional to assess the implications of this clause.