Can arbitration proceedings for Baya Bar be conducted on a class-wide basis?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.3.3 This arbitration provision is self-executing and will remain in full force and effect after expiration or termination of this Agreement. Any arbitration will be conducted on an individual, and not a class-wide or multiple plaintiffs, basis. If either party fails to appear at any properly-noticed arbitration proceeding, an award may be entered against the party by default or otherwise, notwithstanding the failure to appear. Judgment upon an arbitration award may be entered in any court having jurisdiction and will be binding, final and not subject to appeal. No punitive or
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, any arbitration will be conducted on an individual basis, explicitly excluding class-wide or multiple plaintiff actions. This means that franchisees are only able to pursue claims against Baya Bar individually through arbitration.
This clause prevents franchisees from joining together to bring a single, collective action against Baya Bar. It also specifies that if a party does not attend a scheduled arbitration proceeding after receiving proper notice, an award may be issued against them by default. Furthermore, the FDD states that any judgment made during arbitration is binding, final, and not subject to appeal.
This arrangement favors the franchisor, Baya Bar, as it avoids the possibility of large class-action lawsuits and limits potential damages. The document also specifies that punitive or exemplary damages will not be awarded against Baya Bar, the franchisee, or related entities during arbitration or any other legal proceedings, as these are explicitly waived.
This type of clause is common in franchise agreements. Prospective franchisees should understand that they are giving up their right to participate in a class action against Baya Bar and should consider the implications of this limitation before investing in a franchise.