Under what circumstances related to payment defaults is arbitration not required for Amorino?
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 for payment defaults are explicitly excluded from the mandatory arbitration requirement. This means that Amorino can pursue claims against a franchisee for unpaid amounts through the court system rather than being forced to resolve the dispute through arbitration. This exception benefits Amorino by allowing them to use potentially faster and more direct legal avenues to recover outstanding payments.
However, any claims that a franchisee might raise in defense against a payment claim are subject to a one-year statute of limitations. This means that if Amorino sues a franchisee for non-payment, the franchisee cannot bring up any defenses related to the payment claim if they knew or should have known about the issue more than one year prior. This creates a strict timeline for franchisees to raise any counterclaims or defenses related to payment disputes.
This arrangement is fairly common in franchising, as franchisors often want to retain the ability to quickly pursue collections through the courts. The one-year limitation on defensive claims is less typical and something a prospective franchisee should carefully consider. It is important for franchisees to promptly address and document any issues that could potentially lead to a payment dispute to ensure they can raise these issues as a defense if necessary.