Where will arbitration occur for Belocal, and who initially pays the costs?

According to Belocal's 2025 Franchise Disclosure Document, arbitration will be conducted in the city where Belocal maintains its principal business office at the time of the arbitration. This means that a franchisee may be required to travel to Belocal's headquarters for arbitration proceedings, regardless of where the franchise is located.

Initially, the costs and expenses of arbitration paid to the American Arbitration Association (AAA) and the arbitrator are to be paid equally by both sides involved in the arbitration. However, all other arbitration-related expenses, such as attorneys' fees and travel expenses, are to be paid initially by the party that incurred them. This could create a financial burden for the franchisee at the outset of the arbitration process.

Ultimately, the arbitrator is required to award the reasonable costs and fees, including attorneys' fees, to the prevailing party in the arbitration. This means that if the franchisee wins the arbitration, Belocal would have to reimburse the franchisee for their arbitration costs and legal fees. Conversely, if Belocal prevails, the franchisee would be responsible for Belocal's costs. This "loser pays" provision can be a significant factor in deciding whether to pursue arbitration.