Are All County franchisees required to submit compulsory counterclaims during arbitration?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
In connection with any arbitration proceeding, each party will submit or file any claim which would constitute 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 which is not submitted or filed in such a proceeding will be barred.
Any arbitration must be on an individual basis and the parties and the arbitrator will have no authority or power to proceed with any claim as a class action or otherwise to join or consolidate any claim with any claim or any other proceeding involving third parties.
The arbitration will be administered by the AAA pursuant to its Commercial Arbitration Rules then in effect by one arbitrator.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, franchisees are required to submit any claim that would constitute a compulsory counterclaim during an arbitration proceeding. This requirement is based on the definition provided by Rule 13 of the Federal Rules of Civil Procedure. If a claim meets this definition and is not submitted or filed during the arbitration, it will be barred from being pursued in the future.
This means that if an All County franchisee has a legal claim against the franchisor that arises from the same transaction or occurrence as the franchisor's claim against them, the franchisee must bring that claim in the same arbitration proceeding. Failure to do so could result in the franchisee losing the right to pursue that claim later on. This rule aims to promote efficiency and prevent multiple legal proceedings arising from the same dispute.
It is important for prospective All County franchisees to understand this requirement and to consult with legal counsel to determine whether any potential claims they may have against the franchisor would be considered compulsory counterclaims. Franchisees should also be aware that the arbitration must be conducted on an individual basis, and class action claims are not permitted. The arbitration will be administered by the American Arbitration Association (AAA) according to its Commercial Arbitration Rules.