Can arbitration proceedings between Anago and the franchisee be conducted on a class-wide basis?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Procedure) within the same proceeding. Any claim which is not submitted or filed as required will be forever barred. The arbitrator may not consider any settlement discussions or offers that might have been made by either Subfranchisor or Franchisor.
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;
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, arbitration proceedings between the Franchisor and Subfranchisor will be conducted on an individual basis. Specifically, the agreement states that arbitration cannot be conducted on a class-wide basis, commenced or consolidated with other proceedings, or brought on the Subfranchisor's behalf by an association or agent. This means that franchisees are restricted from participating in class action lawsuits against Anago.
However, there is an exception to this rule. If a court or arbitrator determines that the clause preventing class-wide arbitration is unenforceable, then the arbitration clause will not apply to the specific dispute. In this case, the dispute will be resolved in a judicial proceeding according to the agreements' dispute resolution provisions.
This waiver of class actions is further reinforced by Section 13.9 of the agreement, which explicitly states that no party shall initiate or participate in any class action litigation claim against any other party bound by the agreement. This provision remains in effect even after the termination or expiration of the agreement, as outlined in Section 13.10. This means that even after the franchise agreement ends, the franchisee is still prohibited from participating in a class action against Anago.