Under what circumstances is an All County arbitrator prohibited from staying the effectiveness of a pending termination of the Agreement?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 43–157)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, an arbitrator is explicitly prohibited from staying the effectiveness of any pending termination of the Franchise Agreement. This means that if All County decides to terminate the agreement with a franchisee, the arbitrator cannot halt or delay that termination while arbitration proceedings are ongoing.
This provision is significant for prospective franchisees because it means that All County has the power to terminate the agreement, and that termination will take effect immediately, regardless of any disputes that are being arbitrated. The franchisee would not be able to continue operating the business while awaiting the outcome of the arbitration. This could create a substantial risk for the franchisee, as they could lose their business even if they have a strong case in the arbitration.
This type of clause is not uncommon in franchise agreements, as franchisors often want to maintain control over their brand and system. However, it is important for franchisees to understand the implications of such a clause and to carefully consider the risks before investing in an All County franchise. Franchisees should seek legal counsel to fully understand their rights and obligations under the Franchise Agreement.