What happens if a party fails to appear at a properly noticed arbitration proceeding for Alloy?
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 may proceed even if a party fails to actively participate or appear. If a party fails to appear at a properly noticed arbitration proceeding without good cause, the arbitrator or administering organization can enter a final award against the non-appearing party. This award would be similar to a default judgment.
This means that if an Alloy franchisee receives proper notice of an arbitration hearing but does not attend, they risk the arbitrator ruling against them by default. This could result in significant financial or operational consequences, depending on the nature of the dispute. It is crucial for franchisees to take all arbitration notices seriously and participate actively, or at least seek legal counsel, to protect their interests.
Additionally, the arbitrator can enter a final award against a party that fails to make full payment of their share of required arbitration fees and costs within ten days after notice and demand, assuming there is no court order to the contrary. This highlights the importance of fulfilling financial obligations related to the arbitration process to avoid a default judgment. Franchisees should ensure they understand and can meet these financial requirements if arbitration is initiated.