In the Baya Bar franchise agreement, what is the effect of a notice, request, or demand for arbitration on the termination of the agreement?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 10.3.5 In proceeding with arbitration and in making determinations hereunder, no arbitrator shall extend, modify or suspend any terms of this Agreement or the reasonable standards of business performance and operation established by Franchisor in good faith.
No notice, request or demand for arbitration shall stay, postpone or rescind the effectiveness of any termination of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, a notice, request, or demand for arbitration does not halt or reverse the termination of the franchise agreement. This means that even if a franchisee initiates arbitration proceedings, the termination of their agreement remains in effect.
This provision ensures that Baya Bar can proceed with a termination without being held up by ongoing arbitration. However, the arbitrator cannot extend, modify, or suspend any terms of the agreement or the standards of business performance established by Baya Bar.
It is important to note that certain claims are excluded from mandatory mediation or arbitration, including claims for injunctive relief, disputes arising from antitrust laws, disputes related to the Lanham Act regarding the ownership or validity of the Marks, and enforcement of post-termination obligations, such as non-competition covenants. These exceptions allow Baya Bar to pursue legal action in court for these specific types of claims.