Can arbitration be brought on the Subfranchisor's behalf by any association or agent against Anago?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor and Subfranchisor agree that arbitration will be conducted on an individual basis and that an arbitration proceeding between Franchisor and Franchisor's affiliates, or Franchisor and their respective shareholders, officers, directors, agents, and employees, on the one hand, and Subfranchisor (or Subfranchisor's owners, guarantors, affiliates, and employees), on the other hand, may not be: (i) conducted on a class-wide basis, (ii) commenced, conducted or consolidated with any other arbitration proceeding, or (iii) brought on Subfranchisor's behalf by any association or agent. Notwithstanding the foregoing, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute, controversy or claim that otherwise would be subject to arbitration under this Section, then all parties agree that this arbitration clause shall not apply to that dispute, controversy or claim and that such dispute, controversy or claim shall be resolved in a judicial proceeding in accordance with the dispute resolution provisions of the Agreements.
Despite Franchisor's and Subfranchisor's agreement to arbitrate, Franchisor and Subfranchisor each have the right in a proper case to seek temporary restraining orders and temporary or preliminary injunctive relief from a court of competent jurisdiction; provided, however, that Franchisor and Subfranchisor must contemporaneously submit our dispute, controversy or claim for arbitration on the merits as provided in this Section.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, arbitration proceedings between Anago and a Subfranchisor must be conducted on an individual basis. Anago and the Subfranchisor agree that arbitration cannot be brought on the Subfranchisor's behalf by any association or agent. This means a Subfranchisor cannot have an external organization or representative initiate or manage the arbitration process for them.
However, if a court or arbitrator determines that the restriction on class-wide or consolidated arbitration is unenforceable, then the agreement to arbitrate will not apply to the specific dispute, controversy, or claim. In such cases, the matter would be resolved through judicial proceedings as outlined in the agreements.
Despite the agreement to arbitrate, both Anago and the Subfranchisor retain the right to seek temporary restraining orders and preliminary injunctive relief from a court, provided that they simultaneously submit the dispute for arbitration on the merits. This ensures that urgent matters can be addressed quickly while still adhering to the arbitration process for the underlying dispute.