Does the All Team arbitration provision remain in effect after the transfer, termination, or expiration of the agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator will apply the provisions of any applicable statute of limitations. In connection with any arbitration proceeding, ATFC and FRANCHISEE will submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any of these compulsory claims which are not submitted or filed in the same proceeding in which they relate will be barred. This provision will continue in full force and effect subsequent to and notwithstanding the Transfer, or the termination or expiration of the term of this Agreement. Except as provided in subsection A. above, the arbitration will be conducted on an individual, not a class-wide basis. None of the parties to the arbitration will be entitled to consolidation of the arbitration proceedings with the proceedings of any third party, nor will the arbitrator or any court be empowered to order a consolidation of proceedings with any third party.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the arbitration provision remains in full effect after the transfer, termination, or expiration of the franchise agreement. This means that even after the franchise relationship ends, both All Team and the franchisee are still bound by the arbitration agreement for resolving disputes.
Specifically, any compulsory counterclaims, as defined by Rule 13 of the Federal Rules of Civil Procedure, must be submitted or filed in the same arbitration proceeding. Failure to do so will result in those claims being barred. This continuation of the arbitration provision ensures that disputes arising from or related to the franchise agreement, even post-termination, are resolved through arbitration rather than in court.
This clause is significant for prospective franchisees because it limits their options for legal recourse after the franchise agreement concludes. Franchisees need to understand that they cannot avoid arbitration by simply waiting for the agreement to terminate or transfer. Any legal claims they might have against All Team related to the franchise must still go through the arbitration process, potentially saving both parties time and money, but also limiting certain legal avenues.