What is the required background or experience of the arbitrator selected for a Belocal franchise dispute?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) The parties agree that, to the extent that any disputes cannot be resolved directly between Franchisee and Franchisor, and following compliance with the applicable mediation requirements set forth in Section 14.B. above, any dispute, controversy, or claim arising out of, in connection with, or relating to this Agreement, and the relationships created hereby; or the formation, interpretation, breach, termination, or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, must be resolved by arbitration. The arbitration must be administered in accordance with the Commercial Rules of the AAA. There shall be one arbitrator. The arbitrator must be experienced in franchising or franchise law and have no prior business or professional relationship with either party. All matters relating to arbitration shall be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) ("FAA"). The parties intend and agree that any state laws attempting to prohibit arbitration or void out-ofstate forums for arbitration are preempted by the FAA and that arbitration shall be held as provided in this Section 14.C. The arbitrator must provide a reasoned award in writing. The award rendered by the arbitrator shall be final, and judgment may be entered thereon in any court having jurisdiction thereof.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a dispute arises that cannot be resolved directly between the franchisee and Belocal through mediation, it will be settled by arbitration. The selected arbitrator must have experience in franchising or franchise law. Additionally, the arbitrator must not have any prior business or professional relationship with either the franchisee or Belocal. This requirement ensures impartiality in the arbitration process. The arbitration will be administered following the Commercial Rules of the American Arbitration Association (AAA), and all matters related to arbitration are governed by the Federal Arbitration Act. The arbitrator is required to provide a reasoned award in writing, which will be final and binding.
This means that prospective Belocal franchisees can expect that any arbitration proceedings will be handled by an arbitrator with relevant expertise and no conflicts of interest. This is intended to provide a fair and unbiased resolution to disputes. The location of the arbitration will be in the city where Belocal maintains its principal business office at the time of the arbitration.
It is important to note that the arbitration will proceed on an individual basis, and class-action lawsuits are not permitted. The costs and expenses of arbitration paid to the AAA and the arbitrator will be initially split equally between the franchisee and Belocal, while other expenses like attorney's fees and travel expenses will be paid by the party incurring them. However, the arbitrator is required to award the prevailing party their reasonable costs and fees, including attorney's fees, incurred during the arbitration.