What rules govern the arbitration proceedings for Azal Coffee disputes?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
Except for action described in Section 18.2, all controversies, disputes or claims between: (i) us and/or our Affiliates and their respective owners, officers, directors, members, managers, employees, agents, representatives, or guarantors; and (ii) you and/or your Affiliates and their respective owners, officers, directors, members, managers, employees, agents, representatives, or guarantors; arising out of or related to (1) this Agreement or any other agreement between Franchisor and Franchisee or any provision of such agreement; (2) our relationship with you; or (3) the scope and validity of this Agreement or any other agreement between Franchisee and Franchisor or any provisions or such agreements (including the validity and scope of the arbitration obligations under this Article, which the parties acknowledge is to be determined by an arbitrator and not a court); must be submitted for binding arbitration in accordance with the provisions of this Article 18 on the demand of either party. Except as otherwise provided in this Article 18, such arbitration proceeding must be conducted in accordance with the commercial arbitration rules (the "Rules") of the American Arbitration Association ("AAA"). The Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) (the "Act") and not any state arbitration law will govern all matters relating to arbitration. This Agreement evidences a transaction involving commerce and, therefore, the Federal Arbitration Act, Title 9 of the United States Code is applicable to the subject matter contained herein. The arbitration will be administrated and conducted in the office of the AAA closest to our principal place of business at the time of the arbitration. The proceedings will be held by a single arbitrator agreed upon by the parties or otherwise appointed by the District Court for the State of our principal place of business and located in the county of our principal place of business. Any arbitrator appointed must have at least ten (10) years' experience in franchise matters and will have the right to award or include in any award the specific performance of this Agreement. The decision of the arbitrator will be final and binding upon the parties. Judgment upon the award rendered by the arbitrator may be entered in any court having personal and subject matter jurisdiction. The provisions of this Article 18 are intended to benefit and bind certain third party non-signatories and will continue in full force and effect after and notwithstanding the expiration or termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, any controversies, disputes, or claims between Azal Coffee (including its owners, officers, and affiliates) and the franchisee (including their owners, officers, and affiliates) must be submitted for binding arbitration if either party demands it. This applies to issues arising from the Franchise Agreement, any other agreements between Azal Coffee and the franchisee, the relationship between them, or the validity and scope of these agreements, including the arbitration obligations themselves. An arbitrator, not a court, will determine the validity and scope of the arbitration obligations.
The arbitration must follow the commercial arbitration rules of the American Arbitration Association (AAA), but the Federal Arbitration Act governs all arbitration-related matters, not any state arbitration law. The arbitration will be administered and conducted at the AAA office closest to Azal Coffee's principal place of business. A single arbitrator, agreed upon by both parties or appointed by the District Court for the State of Azal Coffee's principal place of business, will conduct the proceedings. This arbitrator must have at least ten years of experience in franchise matters and can award specific performance of the Franchise Agreement.
The arbitrator's decision is final and binding, and judgment upon the award can be entered in any court with jurisdiction. These arbitration provisions benefit and bind certain third-party non-signatories and remain effective even after the Franchise Agreement expires or terminates. This means that franchisees must resolve disputes through arbitration, potentially saving time and money compared to court litigation, but they also give up the right to a jury trial. Franchisees should consider the implications of these arbitration rules, including the location of proceedings and the arbitrator's expertise, before entering into the agreement.