After entering into a Beehive Homes franchise agreement, is a franchisee allowed to settle claims?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
XVI. ARBITRATION
Any dispute, controversy or claim arising out of or in relation to this Agreement, or any modification thereof, or the breach thereof (including, but not limited to contract, tort and statutory claims) shall be settled by arbitration under the auspices of the American Arbitration Association, pursuant to its Commercial Arbitration Rules and judgment rendered on the arbitration award may be entered in any court having jurisdiction thereof. The costs of the arbitration will be borne equally by the parties. The Franchisor and Franchisee agree that Salt Lake City, Utah shall be the site for all hearings held under this Article, and that no party shall pursue class claims and/or consolidate the arbitration with any other proceedings to which the Franchisor or Franchisor is a party.
Any disputes concerning the enforceabilityor scope of this Article shall be resolved pursuant to the Federal Arbitration Act, 9 U.S.C. §1 et seq. (the "FAA"), and the Franchisee acknowledges that, notwithstanding any contrary language in this Agreement or in the Franchise Disclosure Document, the FAA preempts any state law restrictions on the enforcement of this Article in this Agreement according to its terms, including any restrictions on the site of the arbitration.
If any provision of this Article is unenforceable, that provision is severable from the remainder of this Article, and the balance of this Article shall remain in full force and effect. In addition, any ruling invalidating any other portion of this Agreement shall not affect the validity of this Article.
Notwithstanding any other provision of this Article, Franchisor may bring an action for injunctive relief in any court having jurisdiction to enforce the Franchisor's trademark or proprietary rights, in order to avoid irreparable harm to the Franchisor, it affiliates, or the franchise System as a whole.
The sole entity against which the Franchisee may seek damages or any remedy under law or equity for any arbitrable claim is Franchisor or its successors or assigns. The Franchisee agrees that the shareholders, directors, officers, employees, agents and representatives of the Franchisor and of its affiliates, shall not be liable on or named as a party in any litigation or other proceedings
Source: Item 23 — RECEIPTS (FDD pages 34–123)
What This Means (2025 FDD)
The 2025 Beehive Homes Franchise Disclosure Document addresses dispute resolution through arbitration. Specifically, any dispute arising from the franchise agreement, including contract, tort, and statutory claims, must be settled through arbitration under the American Arbitration Association's Commercial Arbitration Rules. The arbitration costs will be equally shared between Beehive Homes and the franchisee, and the arbitration site will be Salt Lake City, Utah. Franchisees are prohibited from pursuing class action claims or consolidating the arbitration with other proceedings involving Beehive Homes.
However, the agreement also specifies that Beehive Homes can pursue injunctive relief in any court to protect its trademark or proprietary rights to avoid irreparable harm. The franchisee can only seek damages or remedies from Beehive Homes, its successors, or assigns, and not from the company's shareholders, directors, officers, employees, agents, or representatives.
While the FDD outlines the process for resolving disputes through arbitration, it does not explicitly state whether a franchisee is allowed to independently settle claims. A prospective franchisee should clarify with Beehive Homes under what specific circumstances they are allowed to settle claims independently, and what types of claims those might be.