Is arbitration mandatory for all disputes between a B Bops developer and the company?
B_Bops Franchise · 2025 FDDAnswer from 2025 FDD Document
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- ARBITRATION. Except for controversies, disputes or claims related to or based on the Licensed Marks or any confidential information or trade secrets of Company, all controversies, disputes or claims between Developer and Company, its affiliates and their respective directors, officers, shareholders, agents and employees arising out of or related to (i) this Agreement or any other agreement between the parties; (ii) the relationship of the parties hereto; or (iii) the validity of this Agreement or any other agreement between the parties shall, on the demand of either party, be submitted to arbitration in accordance with the current commercial arbitration rules of the American Arbitration Association. Any arbitration proceedings should be conducted in Des Moines, Iowa and shall be heard by one arbitrator, the identity of whom shall be agreed upon in advance by the parties. In the event the parties are unable to agree upon a single arbitrator, each party shall select one arbitrator and the two arbitrators so selected shall in turn select a third arbitrator and the arbitration proceeding shall be heard before the three person panel.
Source: Item 23 — RECEIPTS (FDD pages 53–145)
What This Means (2025 FDD)
According to B Bops's 2025 Franchise Disclosure Document, arbitration is mandatory for most disputes between a developer and the company. However, there are exceptions. Specifically, controversies, disputes, or claims related to or based on the Licensed Marks or any confidential information or trade secrets of B Bops are excluded from mandatory arbitration.
For all other controversies, disputes, or claims arising out of or related to the Development Agreement, any other agreement between the parties, or the relationship of the parties, either B Bops or the developer can demand that the matter be submitted to arbitration. This includes disputes regarding the validity of the agreements.
The arbitration proceedings must be conducted in Des Moines, Iowa. The dispute will be heard by a single arbitrator if both parties agree on the individual. If they cannot agree, each party selects an arbitrator, and those two arbitrators then select a third to form a three-person panel. This clause dictates the process and location for resolving disputes, potentially saving time and money compared to litigation, but it also means a franchisee gives up the right to sue in court on certain issues.