What rules govern the resolution of disputes by arbitration for an Amorino franchise?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Except as otherwise provided in this Agreement, if the mediation is not successful, any controversy, claim, cause of action or dispute arising out of, or relating to your Store or this Agreement including, but not limited to (i) any claim by either party, or any person in privity with or claiming through, on behalf of or in the right of either party, concerning the entry into, performance under or termination of this Agreement or any other agreement entered into by Franchisor, or its subsidiaries or affiliates, and Franchisee, (ii) any claim against a past or present employee, officer, director or agent of either party, (iii) any claim of breach of this Agreement, and (iv) any claims arising under state or federal laws, shall be submitted to final and binding arbitration as the sole and exclusive remedy for any such controversy or dispute.
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.
Persons in privity with or claiming through, on behalf of or in the right of Franchisee and Franchisor include, but are not limited to, spouses and other family members, heirs, executors, representatives, successors and assigns.
- (2) The right and duty of the parties to this Agreement to resolve any disputes by arbitration shall be governed exclusively by the Federal Arbitration Act, as amended, and arbitration shall be conducted pursuant to the then-prevailing Commercial Arbitration Rules of the AAA.
The arbitration shall be held at the office of the AAA in New York County, New York.
Any dispute as to the arbitrability of any controversy, claim, cause of action or dispute shall also be determined by arbitration.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, disputes that cannot be resolved through mediation will be settled by binding arbitration. This applies to any controversy, claim, cause of action, or dispute related to the franchise, including claims about the agreement's entry, performance, or termination. It also covers claims against employees, officers, directors, or agents of either party, breaches of the agreement, and claims arising under state or federal laws. This means a franchisee must address many potential issues through arbitration rather than in court.
For claims not involving payment defaults, a franchisee must file a written demand for arbitration within one year from when they knew or should have known about the event that led to the claim. Failure to do so within this timeframe results in a waiver of any remedy. However, claims by Amorino regarding payment defaults can be made at any time within the applicable legal statute of limitations. This creates a stricter timeline for franchisees to bring claims compared to Amorino, especially regarding payment issues.
The arbitration process is governed by the Federal Arbitration Act and the Commercial Arbitration Rules of the AAA (American Arbitration Association). The arbitration will be held at the AAA office in New York County, New York. Any disputes regarding whether a particular issue is subject to arbitration will also be decided through arbitration. This means that the arbitrator, rather than a court, will determine the scope of arbitrable issues. One arbitrator will be selected from a panel of neutral arbitrators provided by the AAA and shall be chosen by the striking method. The fees and expenses of the proceeding may be awarded by the arbitrator to the prevailing party.
These arbitration terms are common in franchise agreements, but prospective Amorino franchisees should carefully consider the implications of agreeing to resolve disputes through arbitration, including the limited appeal options and the potential costs involved. Franchisees should also be aware of the one-year limitation for filing arbitration demands, as this could impact their ability to pursue certain claims against Amorino.