What disputes involving Alloy must be submitted to binding arbitration?
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.
The arbitration must take place in the city of our then-current headquarters.
The arbitrator must follow the law and not disregard the terms of this Agreement or disregard the law based on principles of justice or equity which are not a specific part of the applicable law.
The arbitrator must have at least 5 years of significant experience in franchise law. A judgment may be entered upon the arbitration award by any state or federal court in the state where we maintain our headquarters or the state where your Facility is located. The decision of the arbitrator will be final and binding on all parties to the dispute; however, the arbitrator may not under any circumstances: (1) stay the effectiveness of any pending termination of this Agreement; (2) assess punitive or exemplary damages; or (3) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance that we set.
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, any arbitration must be conducted on an individual basis, meaning neither the parties nor the arbitrator have the authority to proceed with any claim as a class action or consolidate claims with other parties. If a court determines that this limitation on class action or claim consolidation is unenforceable, the entire arbitration agreement becomes void, and all claims must be submitted to the courts.
The arbitration must occur in the city where Alloy's headquarters are located. The arbitrator is required to follow the law and the terms of the agreement, possessing at least five years of experience in franchise law. The arbitrator's decision is final and binding; however, they cannot stay the termination of the agreement, assess punitive damages, or modify any lawful term of the agreement or business performance standards set by Alloy.
This arbitration provision is self-executing, allowing arbitration to proceed regardless of a party's participation. If a party fails to appear at a properly noticed arbitration proceeding or pay their share of arbitration fees within ten days of notice, the arbitrator can enter a final award against that party, similar to a default judgment. This clause ensures that disputes are resolved through arbitration efficiently, while also protecting Alloy's interests by preventing class actions and limiting the arbitrator's powers.