Can the arbitrator in an Apricot Lane franchise dispute consider settlement discussions or offers?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
FRACHISOR and FRANCHISEE further agree that, in any arbitration proceeding, each party must submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding as the claim to which it relates. Any claim which is not submitted or filed as required is forever barred. The arbitrator may not consider any settlement discussions or offers that might have been made by either FRACHISOR or FRANCHISEE and will not have the right to declare any Mark generic or otherwise invalid. Except as otherwise described in this Agreement, FRACHISOR and FRANCHISEE and its owners waive to the fullest extent permitted by law any right to or claim for any punitive or exemplary damages against the other and agree that, in the event of a dispute between FRACHISOR and FRANCHISEE, the party making a claim will be limited to equitable relief and to recovery of any actual damages he, she, or it sustains.
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, during an arbitration proceeding, the arbitrator is not allowed to consider any settlement discussions or offers that either Apricot Lane or the franchisee might have made. This means that any attempts to resolve the dispute through negotiation or compromise prior to arbitration will not be taken into account during the arbitration process itself.
This restriction ensures that the arbitrator's decision is based solely on the merits of the case and the evidence presented, rather than being influenced by prior settlement negotiations. It encourages both parties to present their strongest case during arbitration, as previous offers or discussions hold no weight.
For a prospective Apricot Lane franchisee, this implies that they should approach arbitration with the understanding that all arguments and evidence must be presented anew. Franchisees should be prepared to present their case thoroughly, regardless of any previous settlement attempts. This clause promotes a focus on the formal arbitration process rather than relying on prior informal discussions.
This type of clause is not uncommon in franchise agreements, as franchisors often seek to maintain a consistent and unbiased dispute resolution process. Franchisees should be aware of this limitation and prepare accordingly if a dispute arises that leads to arbitration.