After the expiration or termination of the Baya Bar franchise agreement, does the arbitration provision remain in effect?
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, the arbitration provision within the franchise agreement remains in full effect even after the agreement's expiration or termination. This means that any disputes arising between Baya Bar and the developer (franchisee) will still be subject to arbitration, as outlined in the agreement, even after the franchise relationship has ended.
This continuation of the arbitration provision is significant for a prospective Baya Bar franchisee because it dictates how disputes will be resolved, even after the franchise agreement concludes. Franchisees should be aware that they cannot pursue litigation in court for disputes covered by the arbitration agreement after the agreement ends; instead, they must go through the arbitration process. This can impact the cost, speed, and potential outcomes of dispute resolution.
The FDD specifies that the arbitration will be conducted on an individual basis, not as part of a class action or with multiple plaintiffs. The location for hearings and proceedings will be in Staten Island, New York, or at the American Arbitration Association, unless Baya Bar elects to hold it in the county where the franchisee's principal place of business is located. Furthermore, the agreement explicitly waives the right to punitive or exemplary damages against either party in arbitration proceedings.
This clause ensures that both Baya Bar and its franchisees continue to be bound by the arbitration agreement, providing a consistent method for resolving disputes, even after the franchise relationship has formally ended. Franchisees should carefully consider the implications of this clause, particularly regarding the location and scope of potential arbitration proceedings.