What is the nature of the arbitrator's award in a dispute with Aunt Millies Bakeries?
Aunt_Millies_Bakeries Franchise · 2025 FDDAnswer from 2025 FDD Document
- §11.3 ARBITRATION: If the parties are unable to resolve the dispute through mediation, either party seeking relief shall file an arbitration demand within ten (10) days following the conclusion of the mediation process, which period shall constitute an agreed time limitation, and such demand shall be limited to the cause(s) of action within the scope of the mediation conducted in accordance of Section 11.2 above. Any dispute between the parties subject to this Article shall be decided by neutral, binding arbitration conducted in accordance with the Judicial Arbitration and Mediation Services, Inc. ("JAMS"). The arbitration shall be conducted by one arbitrator and shall be held in the county where the principal place of business of DISTRIBUTOR is then located. The arbitrator shall apply the substantive law specified in Section 12.8 of this Agreement, except that with respect to arbitration matters, the provisions of the Federal Arbitration Act shall be controlling. Judgment upon the award rendered by the arbitrator shall be final and binding and may be entered in any court having jurisdiction thereof.
- §11.4 BUSINESS JUDGMENT: The parties hereto recognize, and any mediator, arbitrator or judge is affirmatively advised, that this Agreement reserves to AUNT MILLIE'S the right to take (or refrain from taking) certain actions in the exercise of its business judgment based on its assessment of the overall best interests of the network and/or Distribution Program. Where such discretion has been exercised, and is supported by the reasonable business judgment of AUNT MILLIE'S, neither a mediator nor an arbitrator nor a judge shall substitute his or her judgment for the judgment so exercised by AUNT MILLIE'S .
- §11.5 DAMAGES AND LIMITATION OF AWARDS: IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY CONSEQUENTIAL,
INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES AND ALL CLAIMS TO SUCH DAMAGES ARE HEREBY WAIVED.
AUNT MILLIE'S and DISTRIBUTOR agree that no form of action or proceeding permitted hereby will be maintained by any party to enforce any liability or obligation of the other party, whether arising from this Agreement or otherwise, except in accordance with the provisions hereof, and unless the proceeding is brought within the time periods set forth.
- §11.6 ATTORNEY'S FEES. Except as specifically provided in Section 11.2, the prevailing party in any arbitration or other action to enforce this Agreement will be entitled to recover its attorney's fees, expert fees, costs and expenses in connection with such action.
- §11.7 INDIVIDUAL ACTIONS. The parties agree that any proceedings to resolve or litigate any dispute in arbitration or in court, or otherwise will be conducted solely on an individual basis, and that neither DISTRIBUTOR nor AUNT MILLIIE'S will seek to have any dispute heard as a class action, a representative action, a collective action, a private attorney-general action or in any proceeding in which DISTRIBUTOR or AUNT MILLIE'S acts or proposes to act in a representative capacity. The parties agree that no arbitration or proceeding will be joined, consolidated or combined with another arbitration or proceeding without prior written consent of both DISTRIBU-TOR and AUNT MILLIE'S and all parties to any such arbitration or proceeding.
Source: Item 23 — RECEIPT (FDD pages 44–196)
What This Means (2025 FDD)
According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, any dispute between the parties is subject to neutral, binding arbitration conducted in accordance with the Judicial Arbitration and Mediation Services, Inc. The arbitration will be conducted by one arbitrator and held in the county where the principal place of business of the distributor is located. The arbitrator must apply the substantive law specified in Section 12.8 of the agreement, but the provisions of the Federal Arbitration Act will be controlling with respect to arbitration matters.
The arbitrator's judgment upon the award is final and binding, and may be entered in any court having jurisdiction. However, the agreement explicitly states that neither party is liable to the other for any consequential, incidental, indirect, special, punitive, or exemplary damages, as all claims to such damages are waived. This limitation on damages could significantly impact the potential financial outcomes of any dispute resolution process for an Aunt Millies Bakeries distributor.
Furthermore, the agreement emphasizes that it reserves the right for Aunt Millies Bakeries to make business decisions based on its assessment of the overall best interests of the network and distribution program. The arbitrator is affirmatively advised not to substitute their judgment for the business judgment exercised by Aunt Millies Bakeries, provided it is supported by reasonable business judgment. This clause potentially limits the arbitrator's scope of review and decision-making authority, as it defers to the business judgment of Aunt Millies Bakeries in certain matters.
In any arbitration or other action to enforce the agreement, the prevailing party will be entitled to recover its attorney's fees, expert fees, costs, and expenses, except as specifically provided in Section 11.2. All proceedings to resolve disputes will be conducted solely on an individual basis, and neither the distributor nor Aunt Millies Bakeries will seek to have any dispute heard as a class action or in any representative capacity. This means that franchisees are restricted from joining together to pursue claims against the franchisor.