Can an arbitrator stay the effectiveness of a pending termination of the All Team franchise agreement?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator will have the right to award or include in his award any relief which he deems proper in the circumstances, including money damages (with interest on unpaid amounts from date due), specific performance, and attorneys' fees and costs; however, the arbitrator will not be allowed to award or include in his award any punitive, exemplary, or consequential damages, to which the parties waive any right. The arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, or enforceability of this Section, including but not limited to, any claim that all or any part of this Section is void or voidable. The award and decision of the arbitrator will be conclusive and binding upon all parties, and judgment upon the award may be entered in any court of competent jurisdiction; however, the arbitrator may not under any circumstances: (1) stay the effectiveness of any pending termination of this Agreement; or (2) make any award which extends, modified or suspends any lawful term of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, an arbitrator does not have the authority to stay the effectiveness of any pending termination of the franchise agreement. The document explicitly states that the arbitrator's powers are limited in this regard.
This means that if All Team decides to terminate a franchise agreement and the matter goes to arbitration, the termination will proceed regardless of the arbitration process. The arbitrator cannot halt or delay the termination while the dispute is being resolved. This is a significant point for prospective franchisees to consider, as it means All Team has the power to proceed with a termination even if the franchisee disputes the grounds for termination and is seeking resolution through arbitration.
This provision favors the franchisor, All Team, by allowing them to proceed with a termination without waiting for the outcome of arbitration. Franchisees should be aware of this limitation and understand that their franchise can be terminated even while they are contesting the termination through arbitration. Franchisees should seek legal counsel to fully understand their rights and obligations in the event of a termination dispute.