In All Team franchise arbitration, are parties allowed to waive their right to contest the validity or enforceability of the arbitrator's award?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
Each party waives any right to contest the validity or enforceability of the award of an arbitrator under this Section except to the extent permitted by applicable law. The arbitrator must submit a reasoned award and this award must be consistent with the terms of this Agreement. If the arbitrator's award is not reasoned or not consistent with the terms of this Agreement, then notwithstanding the foregoing, ATFC may appeal the arbitration award in Federal or State Court.
Source: Item 22 — CONTRACTS (FDD pages 33–34)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, each party involved in arbitration waives their right to contest the validity or enforceability of the arbitrator's award, except as permitted by applicable law. This means that once an arbitrator makes a decision, the parties generally cannot challenge it in court, ensuring a quicker and more final resolution. However, this waiver is not absolute, as it is subject to the limitations and exceptions provided by relevant laws.
There is an exception to this rule. If the arbitrator's award is not reasoned or consistent with the terms of the Franchise Agreement, All Team has the right to appeal the arbitration award in Federal or State Court. This provision provides All Team with a mechanism to challenge an award that deviates from established principles or contractual terms.
This clause aims to provide a balance between the efficiency of arbitration and the need for fairness and accuracy in the decision-making process. Franchisees should be aware of this provision and understand that while arbitration is intended to be binding, there are limited circumstances under which the award can be challenged, particularly if the award is not well-reasoned or aligned with the agreement's terms.