Under what circumstances is the arbitrator prohibited from awarding relief in a Beard Papas arbitration?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
In connection with binding arbitration, Franchisor and Franchisee further agree that:
- (a) All matters relating to arbitration, will be governed by the United States Federal Arbitration Act, except as expressly or otherwise set forth in this Agreement;
- (b) The arbitration hearing shall be conducted within 180 days of the demand for arbitration;
- (c) The arbitrator shall render written findings of fact and conclusions of law;
- (d) Except as may be otherwise required and/or prohibited by this Agreement including, but not limited to Sections 7.8, 7.9, 7.13, 7.14, 7.17, and 7.23. of this Agreement, the arbitrator has the right to award or include in his or her award any relief that he or she determines to be proper, including monetary damages, interest on unpaid sums, specific performance, injunctive relief, attorneys' fees, and costs and expenses as allowable under this Agreement. Notwithstanding the foregoing, under no circumstance shall the Arbitrator be authorized to award or declare the Licensed Marks to be generic or invalid;
- (e) They shall each be bound to the limitations periods set forth in Section 7.8 of this Agreement and that, in any arbitration proceeding, Franchisor and Franchisee must each timely submit, within the same arbitration proceeding, any claim that would constitute a compulsory counterclaim as such claims are defined and set forth under Rule 13 of the United States Federal Rules of Civil Procedure. Any claim that is not submitted or filed as required shall be forever barred;
- (f) Judgment upon the arbitrator's award may be entered in any court of competent jurisdiction; and
- (g) Arbitration and/or any arbitration award must be conducted in accordance with the terms of this Agreement including, but not limited to, the requirements set forth in this Section 7.
Source: Item 23 — RECEIPTS (FDD pages 58–275)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, in binding arbitration, the arbitrator is generally empowered to award any relief deemed proper, including monetary damages, interest, specific performance, injunctive relief, attorneys' fees, and allowable costs. However, the arbitrator is explicitly prohibited from awarding or declaring the Licensed Marks to be generic or invalid. This limitation ensures the protection of Beard Papas's brand and intellectual property.
This restriction on the arbitrator's power is significant for prospective franchisees. It means that even in a dispute where a franchisee might otherwise seek to challenge the validity or uniqueness of the Beard Papas trademarks, the arbitrator cannot grant such a remedy. The franchisee is bound by the agreement to acknowledge and respect the brand's trademarks.
Furthermore, both Beard Papas and the franchisee are bound by the limitations periods specified in Section 7.8 of the Franchise Agreement. They must also submit any compulsory counterclaims, as defined by Rule 13 of the United States Federal Rules of Civil Procedure, within the same arbitration proceeding, or those claims will be permanently barred. This encourages efficient resolution of all related disputes in a single proceeding.
Any arbitration must be conducted according to the terms of the Franchise Agreement. The judgment upon the arbitrator's award can be entered in any court of competent jurisdiction. These stipulations ensure that the arbitration process is legally sound and enforceable, providing a structured framework for resolving disputes while safeguarding Beard Papas's brand identity.