In 7 Brew arbitration, what rule defines a compulsory counterclaim?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you further agree that, in connection with any arbitration proceeding, each must submit or file any claim constituting a compulsory counterclaim (as defined by the then-current Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any such claim not submitted or filed in the proceeding will be barred.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, in any arbitration proceeding, a compulsory counterclaim is defined by the then-current Rule 13 of the Federal Rules of Civil Procedure. Both 7 Brew and the franchisee must submit or file any claim that constitutes a compulsory counterclaim within the same proceeding as the original claim to which it relates. Failure to do so will result in the claim being barred.
This means that if a franchisee has a claim against 7 Brew that arises out of the same transaction or occurrence as 7 Brew's claim against them, the franchisee must bring that claim in the same arbitration proceeding. If the franchisee does not, they will be barred from bringing that claim in a separate proceeding later on. This rule is designed to promote efficiency and prevent piecemeal litigation.
It is important for prospective 7 Brew franchisees to understand this requirement, as it could have significant implications for their legal rights. Franchisees should consult with an attorney to determine whether they have any potential counterclaims against 7 Brew and to ensure that they are properly asserted in any arbitration proceeding.