In the Anago franchise agreement, who decides the validity and scope of the arbitration provision?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
(iii)the scope or validity of this Agreement or any other agreement between Subfranchisor (or any of Subfranchisor's owners) and Franchisor (or any of Franchisor's affiliates) or any provision of any of such agreements (including the validity and scope of the arbitration provision under this Section, which Franchisor and Subfranchisor acknowledge is to be determined by an arbitrator, not a court); or
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the validity and scope of the arbitration provision will be determined by an arbitrator, not a court. This is according to Section 13.1 of the Anago franchise agreement, which outlines the arbitration process for resolving disputes.
This means that if a dispute arises between Anago and a subfranchisee, including disagreements about whether the dispute is subject to arbitration or the extent to which the arbitration clause applies, the arbitrator will make the final decision. This is a significant point for potential franchisees to understand, as it removes the initial decision-making power from the court system and places it in the hands of an arbitrator.
For a prospective Anago franchisee, this clause emphasizes the importance of carefully reviewing and understanding the arbitration provisions within the franchise agreement. It is advisable to seek legal counsel to fully grasp the implications of agreeing to have an arbitrator decide on the validity and scope of arbitration, as it can impact their rights and options in case of a dispute with Anago.