Under what rules will arbitration be settled for a Baya Bar franchise dispute?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
10.3 Arbitration.
- 10.3.1 Except disputes not subject to alternative dispute resolution as set forth in Section 10.4, any dispute between Franchisor and Developer 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 10.1 or 10.2, 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.
- 10.3.2 All issues relating to arbitrability or the enforcement of the agreement to arbitrate contained in this Article 10 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 Developer is then located.
- 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
exemplary damages will be awarded against Franchisor, Developer, or entities related to either of them, in an arbitration proceeding or otherwise, and are hereby waived.
10.3.4 The provisions of this Section 10.3 are independent of any other covenant or provision of this Agreement; provided, however, that if a court of competent jurisdiction determines that any of the provisions are unlawful in any way, the court will modify or interpret the provisions to the minimum extent necessary to have them comply with the law.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, any dispute between Baya Bar and a developer arising from the Development Agreement will be settled through arbitration, except for disputes not subject to alternative dispute resolution as outlined in Section 10.4. This process begins if the dispute remains unresolved after initial attempts at resolution as described in Sections 10.1 and 10.2 of the agreement. The arbitration will be managed by the American Arbitration Association or its successor, utilizing the Commercial Arbitration Rules in effect at that time.
All decisions regarding the arbitrability or enforcement of the arbitration agreement will be subject to the Federal Arbitration Act (9 U.S.C. §1 et seq.) and federal common law. The location for hearings and proceedings will be in Staten Island, New York, at the American Arbitration Association offices, or, at Baya Bar's discretion, in the county where the developer's principal business is located.
The arbitration provision is self-executing and remains effective even after the agreement expires or terminates. Arbitrations will be conducted on an individual basis, not as part of a class action or with multiple plaintiffs. Failure of either party to attend a properly noticed arbitration proceeding may result in a default judgment. Any judgment on an arbitration award is final, binding, and not subject to appeal, and it can be entered in any court with jurisdiction. Punitive or exemplary damages are waived for both Baya Bar and the developer.
Finally, the provisions for arbitration are independent of other terms in the agreement. If a court finds any provision unlawful, it will modify or interpret the provision to comply with the law to the minimum extent necessary.