What standards must the arbitrator follow when deciding an Alloy dispute?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
n 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;
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the arbitrator is bound by specific standards when resolving disputes. The arbitrator must adhere to the law and cannot disregard the terms outlined in the franchise agreement. Additionally, the arbitrator cannot disregard the law based on principles of justice or equity which are not a specific part of the applicable law.
To ensure competence, the arbitrator must possess a minimum of 5 years of significant experience in franchise law. This requirement aims to provide that the arbitrator has sufficient expertise to understand the complexities of franchise agreements and relevant legal precedents.
Furthermore, the arbitrator's authority is limited in certain respects. They cannot stay the effectiveness of any pending termination of the agreement, award punitive or exemplary damages, or make any award that extends, modifies, or suspends any lawful term of the agreement or any reasonable standard of business performance set by Alloy. The arbitration must be on an individual basis, and the arbitrator cannot proceed with any claim as a class action or consolidate claims with other proceedings involving third parties. If a court determines that the limitation on class action claims is unenforceable, the entire arbitration agreement becomes void, and all claims must be submitted to the courts.