Under whose auspices will arbitration for Beehive Homes disputes be conducted?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
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)
According to Beehive Homes' 2025 Franchise Disclosure Document, any disputes arising from the franchise agreement will be settled through arbitration under the auspices of the American Arbitration Association (AAA). This means that instead of going to court, a neutral third party, guided by the AAA's Commercial Arbitration Rules, will hear and decide the case. The resulting arbitration award can then be entered as a judgment in any court with jurisdiction. The costs associated with the arbitration will be equally shared between Beehive Homes and the franchisee. The location for all hearings will be Salt Lake City, Utah, and franchisees are prohibited from pursuing class action claims or consolidating their arbitration with other proceedings involving Beehive Homes.
This arbitration clause is governed by the Federal Arbitration Act (FAA), which preempts any state laws that might restrict its enforcement. This ensures that the agreement to arbitrate is upheld according to its terms, including the designated location for arbitration. If any part of the arbitration clause is deemed unenforceable, that specific part can be removed without affecting the validity of the rest of the clause. Furthermore, any ruling that invalidates another part of the franchise agreement will not impact the validity of the arbitration clause.
However, Beehive Homes retains the right to seek injunctive relief in any court to protect its trademarks or proprietary rights, aiming to prevent irreparable harm to the company, its affiliates, or the franchise system. This means that Beehive Homes can still go to court to stop a franchisee from infringing on its brand or intellectual property. The franchisee can only seek damages or remedies from Beehive Homes itself, or its successors or assigns, for any arbitrable claim. The franchisee cannot hold the shareholders, directors, officers, employees, agents, or representatives of Beehive Homes or its affiliates liable in any litigation or proceedings.
For a prospective franchisee, this means that most disputes will be resolved through arbitration, which can be a faster and less expensive alternative to traditional litigation. However, it also means giving up the right to a jury trial and limiting the ability to pursue class action lawsuits. The franchisee should carefully consider the implications of the arbitration clause and consult with an attorney to understand their rights and obligations.