Is class action or claim consolidation allowed in Alloy arbitrations?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Any arbitration must be on an individual basis and the parties and the arbitrator will have no authority or power to proceed with any claim as a class action or otherwise to join or consolidate any claim with any other claim or any other proceeding involving third parties.
In the event a court determines that this limitation on joinder of or class action certification of claims is unenforceable, then this entire commitment to arbitrate will become null and void and the parties must submit all claims to the jurisdiction of the courts.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to the 2025 Alloy Franchise Disclosure Document, any arbitration must be on an individual basis. The agreement explicitly states that neither the parties involved nor the arbitrator possess the authority or power to proceed with any claim as a class action. Furthermore, there is no allowance for joining or consolidating any claim with another claim or any other proceeding involving third parties. This means that each franchisee must pursue their claims independently.
However, there is a condition attached to this restriction. If a court determines that the limitation on joining or class action certification of claims is unenforceable, the entire commitment to arbitrate becomes null and void. In such a case, all claims must be submitted to the jurisdiction of the courts rather than arbitration.
This clause ensures that Alloy franchisees cannot participate in class action lawsuits against the franchisor through arbitration unless a court deems the prohibition unenforceable. This could potentially increase the cost and complexity for franchisees seeking resolution to disputes with Alloy, as they would need to pursue individual arbitration or litigation.