Under what circumstances is arbitration required for disputes involving All County?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
mediation. The parties agree to participate in the mediation proceedings in good faith and with the intention of resolving the dispute if at all possible within thirty (30) days of the notice from the party seeking to initiate the mediation procedures. If the dispute is not resolved within thirty (30) days, the parties are free to pursue arbitration. In addition, if the party receiving notice of mediation has not responded within five (5) days of delivery of the notice or a party fails to participate in the mediation, this Article 25.12.1. will no longer be applicable and the other party can pursue arbitration. The parties agree that the costs of the mediator will be split equally between the parties. Each party must pay its own fees and expenses incurred in connection with the mediation. The mediation proceeding and any negotiations and results thereof will be treated as a compromise settlement negotiation and the entire process is confidential. At least five (5) days prior to the initial mediation session, each party must deliver a written statement of positions.
- 25.12.2. Arbitration. Except as provided in Article 25.12.3., any dispute, controversy or claim between you and us and any of our or your affiliates, officers, directors, shareholders, members, guarantors, employees or owners arising under, out of, in connection with or in relation to this Agreement, any lease of sublease for your Business, any loan or other financial arrangement between us or our affiliates and you, the parties' relationship, your Business, or any System Standard or the scope or validity of the arbitration obligation under this Article not resolved by mediation must be submitted to binding arbitration in accordance with the Federal Arbitration Act. The arbitration will be administered by the AAA pursuant to its Commercial Arbitration Rules then in effect by one arbitrator.
- 25.12.2.1. 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.
25.12.2.2. 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. If a court or arbitrator determines that this limitation or joinder of or class action certification of claims is unenforceable, then the agreement to arbitrate the dispute will be null and void and the parties must submit all claims to the jurisdiction of the courts, in accordance with Article 25.14.
25.12.2.3. The arbitration must take place in the city closest to where our headquarters is located at the time of the dispute.
25.12.2.4. The arbitrator must follow the law and not disregard the terms of this Agreement. The arbitrator must have at least five (5) years of significant experience in commercial law. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or us. The arbitrator may not under any circumstances (a) stay the effectiveness of any pending termination of this Agreement, (b) assess punitive or exemplary damages, (c) certify a class or a consolidated action, or (d) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set. The arbitrator will have the right to make a determination as to any procedural matters as would a court of competent jurisdiction be permitted to make in the state in which the main office of Franchisor is located. The arbitrator will also decide any factual, procedural, or legal questions relating in any way to the dispute between the parties, including, but not limited to: any decision as to whether Article 25.14 is applicable and enforceable as against the parties, subject matter, timeliness, scope, remedies, unconscionability, and any alleged fraud in the inducement.
25.12.2.5. The arbitrator can issue summary orders disposing of all or part of a claim and provide for temporary restraining orders, preliminary injunctions, injunctions, attachments, claim and delivery proceedings, temporary protective orders, receiverships, and other equitable and/or interim/final relief. Each party consents to the enforcement of such orders, injunctions, etc. by any court having jurisdiction.
25.12.2.6. The arbitrator will have subpoena powers limited only by the laws of the state in which the main office of the Franchisor is located.
25.12.2.7. The parties to the dispute will have the same discovery rights as are available in civil actions under the laws of the state in which the main office of Franchisor is then located.
25.12.2.8. All other procedural matters will be determined by applying statutory, common laws, and rules of procedure that control a court of competent jurisdiction in which the main office of Franchisor is then located.
25.12.2.9. Other than as may be required by law, the entire arbitration proceedings (including, but not limited to, any rulings, decisions or orders of the arbitrator) will remain confidential and will not be disclosed to anyone other than the parties to this Agreement.
25.12.2.10. The judgment of the arbitrator on any preliminary or final arbitration award will be final and binding and may be entered in any court having jurisdiction.
25.12.2.11. We reserve the right, but have no obligation, to advance your share of the costs of any arbitration proceeding in order for such arbitration proceeding to take place and by doing so will not be deemed to have waived or relinquished our right to seek recovery of those costs in accordance with Article 25.9. or 25.12.4.
25.12.3. Exceptions to Arbitration. Notwithstanding Articles 25.12.1. and 25.12.2., the parties agree that the following claims will not be subject to arbitration or mediation.
- 25.12.3.1.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, arbitration is required for most disputes that are not resolved through mediation. Prior to arbitration, the parties must first attempt to mediate any dispute, controversy, or claim. This includes disputes between the franchisee and All County, as well as their affiliates, officers, directors, shareholders, members, guarantors, employees, or owners. These disputes can arise from the Franchise Agreement, any lease or sublease for the franchisee's business, any loan or financial arrangement between All County or its affiliates and the franchisee, the parties' relationship, the franchisee's business, or any System Standard.
Mediation begins when one party sends a written "Notification of Dispute" to the other party, outlining the facts, damages, and relief sought. The receiving party must respond within twenty days, stating their version of the facts and position on damages. If the parties cannot resolve the dispute within twenty days after the response, either party may initiate a mediation procedure through the American Arbitration Association (AAA). The parties must jointly select a mediator, and the mediation will take place in the city of All County's corporate headquarters, unless otherwise agreed. If mediation fails to resolve the dispute within thirty days, or if a party fails to respond to the mediation notice within five days or participate in the mediation, the other party can then pursue arbitration.
However, there are exceptions to the arbitration requirement. All County is not required to go to mediation or arbitration for actions seeking equitable relief (such as injunctions), actions for ejectment or possession of property, actions that cannot be arbitrated under applicable law, or All County's initial decision to issue a notice of default or termination. These exceptions allow All County to pursue immediate legal action in certain situations without first going through mediation or arbitration. If a court or arbitrator determines that the limitation or joinder of or class action certification of claims is unenforceable, then the agreement to arbitrate the dispute will be null and void and the parties must submit all claims to the jurisdiction of the courts.