Under the Belocal franchise agreement, what is the effect of the arbitrator's award?

According to Belocal's 2025 Franchise Disclosure Document, the award rendered by the arbitrator is final, and judgment may be entered in any court with jurisdiction. This means that once the arbitrator makes a decision, it is binding, and a court can enforce that decision if necessary. This clause is typical in franchise agreements, as it provides a mechanism for resolving disputes outside of the traditional court system.

Arbitration under the Belocal franchise agreement will be administered in accordance with the Commercial Rules of the AAA (American Arbitration Association). The arbitrator must have experience in franchising or franchise law and no prior business or professional relationship with either party. The arbitrator is required to provide a reasoned award in writing, detailing the basis for their decision. This requirement for a written explanation adds transparency to the arbitration process.

It is important to note that the arbitration must proceed on an individual basis, without the right for any disputes to be arbitrated on a class-action basis or in a representative capacity. This means a Belocal franchisee cannot join their dispute with other franchisees into a single arbitration. The arbitrator cannot award punitive damages, and can only award actual damages sustained by a party. These limitations on the arbitrator's powers are significant for prospective franchisees to consider.