What happens if a court or arbitrator determines that the prohibition of class-wide arbitration is unenforceable for an Anago dispute?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
We and you agree that arbitration will be conducted on an individual basis and that an arbitration proceeding between us and our affiliates, or our and their respective shareholders, officers, directors, agents, and employees, on the one hand, and you (or your 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 your 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.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago's franchise agreement includes a clause requiring arbitration to be conducted on an individual basis, preventing class-wide arbitrations or consolidation with other proceedings. This applies to disputes between Anago and its affiliates, shareholders, officers, directors, agents, and employees, and the franchisee (or their owners, guarantors, affiliates, and employees). The agreement also specifies that claims cannot be brought on behalf of the franchisee by any association or agent.
However, if a court or arbitrator determines that the prohibition on class-wide arbitration is unenforceable for a dispute that would otherwise be subject to arbitration, the arbitration clause will not apply to that specific dispute. Instead, the dispute will be resolved through a judicial proceeding, following the dispute resolution provisions outlined in the Anago agreements.
This means that a franchisee could potentially pursue a class action lawsuit against Anago if the prohibition on class-wide arbitration is deemed unenforceable. This determination would shift the resolution venue from arbitration to a judicial court, potentially altering the legal strategies, costs, and outcomes of the dispute. Franchisees should understand the implications of this clause and consult with legal counsel to assess their rights and options in case of a dispute with Anago.