Is the Alloy arbitration provision self-executing?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
This arbitration provision is self-executing. Specifically, the arbitration may proceed, and the arbitrator has jurisdiction, regardless of whether any party fails to actively participate or appear. In the event that any party fails without good cause (i) to appear at any properly noticed arbitration proceeding; or (ii) to make payment in full of its share of the required arbitration fees and costs within ten (10) days after notice and demand, absent a previously issued court order to the contrary, then the arbitrator or the organization/entity administering the arbitration shall be authorized to enter a final award against such party in the nature of a default judgment or otherwise, notwithstanding the failure to appear or to make the required payment.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the arbitration provision is self-executing. This means that arbitration can proceed, and the arbitrator has jurisdiction, even if a party does not actively participate or appear in the proceedings.
Specifically, if a party fails to appear at a properly noticed arbitration proceeding or fails to pay their share of the required arbitration fees and costs within ten days after notice and demand, without good cause or a court order to the contrary, the arbitrator or administering organization can enter a final award against that party, similar to a default judgment. This clause ensures that the arbitration process can continue even if one party becomes uncooperative or unresponsive.
This self-executing provision is significant for prospective Alloy franchisees because it outlines the consequences of not participating in the arbitration process. It emphasizes the importance of fulfilling obligations related to arbitration, such as attending proceedings and paying fees, and it protects Alloy's ability to resolve disputes efficiently, even if the franchisee is not cooperative. Franchisees should be aware of these stipulations and understand their responsibilities should a dispute arise that requires arbitration.