What happens if the parties do not resolve the Covered Dispute after mediation for Amerispec Inspection Services?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
If the parties do not resolve the Covered Dispute after the conclusion of the mediation, such Covered Dispute must be subject to and resolved exclusively by binding arbitration. This means that all Covered Disputes that either party would otherwise have the legal right to sue for in court shall be subject to final and binding arbitration under the arbitration provisions setforth in this Paragraph 21.1.3 and not decided by a court or a jury. If there are any ambiguities in the terms or conditions of this Paragraph 21, it is the parties' intent that all ambiguities be resolved in favor of arbitration.
For the purposes of this Paragraph 21.1.3, Covered Disputes will not include disputes that an applicable federal statute provides cannot be arbitrated or cannot be subject to a pre-dispute agreement to arbitrate.
21.1.3.1Arbitration Procedure. Either party may commence arbitration by sending written demand for arbitration to the other party. The arbitration proceeding shall be conducted by one arbitrator and, except as otherwise provided in this Paragraph 21, shall be conducted in accordance with the then-current Commercial Arbitration Rules of the AAA. All arbitration proceedings will be held at the offices of the AAA or other suitable offices that the Company selects in the metropolitan area in which its principal place of business is then located (currently, Memphis, Tennessee). The arbitrator shall have no authority to select a different hearing locale. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.).
21.1.3.2 Scope. The arbitrator (and not a court) shall decide all issues in any Covered Dispute, including issues regarding the non-availability of class arbitration, timeliness, arbitration procedures, statute of limitations, and all other issues regarding the application, interpretation, enforceability, coverage, and implementation of this Paragraph 21.1.3, including whether the parties have entered into this Agreement. In accordance with Paragraph 21.5 (Mutual Waiver of Class or Collective Actions), the arbitrator shall have no authority to consider or resolve any claim or issue in a Covered Dispute on any basis other than on an individual basis and may not consolidate or join one or more Covered Disputes pertaining to Franchisee or another Franchisee Related Party with any other dispute(s).
21.1.3.3 Relief. The arbitrator shall have the power and authority to award any remedy or relief available under applicable law, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees and costs (in accordance with Paragraph 20.3 (Right to Interest and Costs)), except the arbitrator may not (a) declare any Name and Mark generic or otherwise invalid or (b) award any special, consequential, exemplary, or punitive damages against either party, except as expressly provided in Paragraph 21.4 (Mutual Waiver of Punitive Damages).
21.1.3.4 Binding Decision. The decision and award of the arbitrator will be final, conclusive, and binding on all parties regarding any claims, counterclaims, issues, or accountings presented or pled to the arbitrator, and judgment on the award, including any partial, temporary or interim award, may be entered in any court of competent jurisdiction (and such proceeding shall not itself be deemed a Covered Dispute).
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to the 2025 FDD, if a Covered Dispute is not resolved through mediation, it must be resolved exclusively through binding arbitration. This means that any disputes that either party would otherwise have the legal right to sue for in court will be subject to final and binding arbitration, and not decided by a court or a jury. The FDD states that any ambiguities in the terms or conditions of this paragraph will be resolved in favor of arbitration.
For the purposes of this paragraph, Covered Disputes will not include disputes that an applicable federal statute provides cannot be arbitrated or cannot be subject to a pre-dispute agreement to arbitrate. Either party may commence arbitration by sending written demand for arbitration to the other party. The arbitration proceeding shall be conducted by one arbitrator and, except as otherwise provided in this Paragraph 21, shall be conducted in accordance with the then-current Commercial Arbitration Rules of the AAA. All arbitration proceedings will be held at the offices of the AAA or other suitable offices that Amerispec Inspection Services selects in the metropolitan area in which its principal place of business is then located (currently, Memphis, Tennessee).
The arbitrator (and not a court) shall decide all issues in any Covered Dispute, including issues regarding the non-availability of class arbitration, timeliness, arbitration procedures, statute of limitations, and all other issues regarding the application, interpretation, enforceability, coverage, and implementation of this Paragraph 21.1.3, including whether the parties have entered into this Agreement. The arbitrator shall have the power and authority to award any remedy or relief available under applicable law, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees and costs (in accordance with Paragraph 20.3 (Right to Interest and Costs)), except the arbitrator may not (a) declare any Name and Mark generic or otherwise invalid or (b) award any special, consequential, exemplary, or punitive damages against either party, except as expressly provided in Paragraph 21.4 (Mutual Waiver of Punitive Damages). The decision and award of the arbitrator will be final, conclusive, and binding on all parties regarding any claims, counterclaims, issues, or accountings presented or pled to the arbitrator, and judgment on the award, including any partial, temporary or interim award, may be entered in any court of competent jurisdiction (and such proceeding shall not itself be deemed a Covered Dispute).