How are claims by Amorino regarding payment defaults handled differently in arbitration compared to other claims?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
Unless, prohibited by applicable law, and except with respect to claims for payment defaults, any claim shall be made by filing a written demand for arbitration within one (1) year from the date on which Franchisor or Franchisee knew or should have known, in the exercise of reasonable diligence, of the conduct, act or other event or occurrence first giving rise to the claim; otherwise, the right to any remedy shall be deemed forever waived and lost.
Claims by Franchisor regarding payment defaults may be made at any time within the applicable legal statute of limitations.
Claims allegedly in defense against claim for payment are barred if not made within the one-year period referred to above.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, claims regarding payment defaults are treated differently in arbitration compared to other types of claims. For most claims, a franchisee or Amorino must file a written demand for arbitration within one year from when they knew or should have known about the event giving rise to the claim. Failure to do so results in a waiver of any remedy. However, this one-year limitation does not apply to claims by Amorino regarding payment defaults.
Claims by Amorino for payment defaults can be made at any time within the applicable legal statute of limitations, which is typically longer than one year. This means Amorino has more time to pursue these claims through arbitration. Conversely, if a franchisee has a defense against a claim for payment, that defense is barred if not brought within the standard one-year period.
In practical terms, this clause benefits Amorino by giving them a longer window to pursue franchisees for unpaid amounts through arbitration, while still requiring franchisees to promptly raise any defenses they may have. A prospective franchisee should be aware of this asymmetry and understand the importance of addressing any payment disputes quickly to preserve their rights.