Under the Anago Guaranty, are disputes subject to arbitration?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Submission to Arbitration.
You acknowledge that the UNIT FRANCHISEE has, under the Unit Franchise Agreement, agreed to submit disputes to arbitration.
You agree that all disputes arising under or involving this Guaranty shall be submitted to arbitration as described in Section 18.11 of the Unit Franchise Agreement.
You further acknowledge and accept as your own the obligation to submit all disputes arising under the Anago Agreements to arbitration in accordance with Section 13.1 of the Franchise Agreement, which provisions are adopted herein as though copied in their entirety.
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.
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.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, disputes arising under the Guaranty are subject to arbitration. Specifically, the Guarantor agrees to submit all disputes arising under or involving the Guaranty to arbitration as described in Section 18.11 of the Unit Franchise Agreement. For Subfranchisors, disputes arising under the Anago Agreements are subject to arbitration in accordance with Section 13.1 of the Franchise Agreement.
This means that instead of resolving disputes in court, Anago franchisees and subfranchisors must resolve disagreements through a private arbitration process. Arbitration typically involves presenting evidence and arguments to a neutral arbitrator who makes a binding decision. This process can sometimes be faster and less expensive than traditional litigation, but it also means giving up the right to a jury trial and a formal court process.
However, Anago retains the right to seek temporary restraining orders and preliminary injunctive relief from a court of competent jurisdiction, even while agreeing to arbitrate the underlying dispute. This allows Anago to take immediate legal action to protect its interests while still pursuing arbitration for the final resolution of the matter. The FDD also specifies certain limitations on the arbitration process, such as restrictions on document requests and a prohibition on interrogatories or requests to admit. Furthermore, arbitration will be conducted on an individual basis and may not be conducted on a class-wide basis or consolidated with any other arbitration proceeding.