What rules govern the arbitration process for disputes related to the Baya Bar franchise?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 20.3.1 Except disputes not subject to alternative dispute resolution as set forth in Section 20.4, any dispute between Franchisor and Franchisee and/or any Principal arising out of or relating to this Agreement, the Attachments hereto or any breach thereof, including any claim that this Agreement or any of its parts, is invalid, illegal or otherwise voidable or void, which has not been resolved in accordance with Sections 20.1 or 20.2, will be resolved by submission to the American Arbitration Association or its successor organization to be settled by a single arbitrator in accordance with the Commercial Arbitration Rules then in effect for such Association or successor organization.
- 20.3.2 All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained in this Article 20 will be governed by the Federal Arbitration Act (9 U.S.C. §1 et seq.) and the federal common law of arbitration. All hearings and other proceedings will take place in Staten Island, New York, or the offices of the American Arbitration Association, or, if Franchisor so elects, in the county where the principal place of business of Franchisee is then located.
- 20.3.3 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 exemplary damages will be awarded against Franchisor, Franchisee, or entities related to either of them, in an arbitration proceeding or otherwise, and are hereby waived.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, disputes between Baya Bar and a franchisee, or any principal, that arise from the Franchise Agreement will be resolved through arbitration. This applies to any claim that the agreement is invalid or has been breached, provided that the dispute has not been resolved through preliminary dispute resolution methods. The arbitration will be managed by the American Arbitration Association (AAA) or its successor, using the Commercial Arbitration Rules in effect at that time.
All decisions regarding the enforceability of the arbitration agreement will be subject to the Federal Arbitration Act and federal common law. The location for hearings and proceedings will be in Staten Island, New York, at the AAA offices, or, if Baya Bar chooses, in the county where the franchisee's primary business is located. This arbitration provision remains effective even after the agreement expires or is terminated.
The arbitration will be conducted on an individual basis, meaning no class-wide or multiple plaintiffs are allowed. If a party fails to attend a properly-noticed arbitration proceeding, a default award may be issued against them. The arbitration award is final, binding, and not subject to appeal, and judgment upon the award may be entered in any court with jurisdiction. Punitive or exemplary damages are waived for both Baya Bar and the franchisee during arbitration proceedings.