What rules govern matters relating to arbitration for the Apricot Lane franchise?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
OR may require FRANCHISEE to remit to FRANCHISOR the amount of the tax owed by FRANCHISOR on such Royalty or payment at the time that the Royalty or other payment is due. Such taxes are distinguished from income taxes, if any, imposed on FRANCHISOR by the state in which the Franchised Business is located. Income taxes shall remain the responsibility of FRANCHISOR.
SECTION 22: ARBITRATION AND CHOICE OF LAW AND VENUE
A. Arbitration
All disputes between FRACHISOR and its affiliates, and their respective owners, officers, directors, agents, and employees, and FRANCHISEE (and/or its owners, guarantors, affiliates, officers, directors, agents, and employees, if applicable) arising out of or related to this Agreement or any provision of this Agreement (including the validity and scope of the arbitration obligation under this Section, which FRACHISOR and FRANCHISEE acknowledge is to be determined by an arbitrator, not a court), any other agreement between FRANCHISOR (or its affiliate) and FRANCHISEE, or any aspect of the relationship between FRANCHISOR and FRANCHISEE, will be determined exclusively by binding arbitration to be conducted by one (1) arbitrator under the then-current commercial arbitration rules of the American Arbitration Association. Arbitration proceedings must be held exclusively in the County in which the headquarters of FRACHISOR is located (which is currently Solano County, California). All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). Judgment upon the award may be entered in any court of competent jurisdiction.
FRACHISOR and FRANCHISEE agree to be bound by the provisions of any limitation on the period of time in which claims must be brought under applicable law or this Agreement, whichever expires earlier. 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.
Arbitration must be conducted on an individual, not a class-wide, basis; only FRACHISOR (and/or its affiliates, and its and their respective owners, officers, directors, agents, and employees) and FRANCHISEE (and/or its owners, guarantors, affiliates, officers, directors, agents, and employees, if applicable) may be the parties to any arbitration proceeding described in this Section; and no such arbitration proceeding may be consolidated with any other arbitration proceeding between FRACHISOR and any other person, corporation, limited liability company, or partnership. Notwithstanding the foregoing or anything to the contrary in this Section or
Section 22.D, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 22.A, then all parties agree that this arbitration clause will not apply to that dispute and that such dispute will be resolved in a judicial proceeding in accordance with this Section 22 (excluding this Section 22.A).
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane FDD, all disputes between Apricot Lane and its franchisees must be resolved through binding arbitration. This includes disputes involving Apricot Lane's affiliates, owners, officers, directors, agents, and employees, as well as the franchisee's equivalent parties. The agreement extends to any issues arising from the Franchise Agreement, other agreements between Apricot Lane and the franchisee, or any aspect of their relationship. An arbitrator, rather than a court, will determine the validity and scope of the arbitration obligation.
The arbitration will be conducted by a single arbitrator following the American Arbitration Association's commercial arbitration rules. The location for these proceedings is exclusively in the county where Apricot Lane's headquarters is located, which is currently Solano County, California. The Federal Arbitration Act governs all arbitration-related matters. The arbitrator's judgment can be entered in any court with competent jurisdiction.
Franchisees should also note that they agree to be bound by any limitations on the period in which claims must be brought under applicable law or the Franchise Agreement, whichever expires earlier. In any arbitration, each party must submit any claim that would constitute a compulsory counterclaim within the same proceeding as the claim to which it relates, or that claim will be barred. The arbitrator is not allowed to consider settlement discussions or offers and cannot invalidate any Apricot Lane marks. Arbitration must be conducted on an individual basis, not as a class action, and cannot be consolidated with other arbitration proceedings between Apricot Lane and other parties. However, if any court or arbitrator deems the class action or consolidation restrictions unenforceable, the arbitration clause will not apply, and the dispute will be resolved in a judicial proceeding.
However, Minnesota franchisees have additional protections. Minnesota Statute §80C.21 and Minnesota Rule 2860.4400J may prohibit Apricot Lane from requiring litigation to be conducted outside Minnesota in certain cases. These provisions also ensure that no condition in the franchise agreement can reduce any rights franchisees have under Minnesota Franchise Law, including the right to submit matters to Minnesota courts and the right to any procedures, forums, or remedies provided by Minnesota law, subject to arbitration obligations.