Under what circumstances related to disputes would Benihana NOT use arbitration?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
| Provision | Franchise Agreement | Summary | |
|---|---|---|---|
| u. | Dispute resolution by arbitration or mediation | Article 15 | All disputes, with the exception of claims based upon or arising under the Lanham Act, the Sherman Act, the Clayton Act (or other federal or state antitrust statute), related to obtaining possession of the Restaurant or Location, related to breaches of Article 18 of the Franchise Agreement, or for monies due to us, are to be arbitrated in Miami, Florida before a three member panel under the Rules of the American Arbitration Association. The arbitrators are not authorized to award punitive damages or attorneys' fees, and an arbitration will be conducted on an individual, and not a class-wide, basis. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 59–65)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, not all disputes are subject to arbitration. Benihana specifies several types of claims that will not be handled through arbitration, offering franchisees clarity on the legal avenues available to them in those specific situations.
Specifically, disputes based upon or arising under the Lanham Act, the Sherman Act, the Clayton Act, or other federal or state antitrust statutes are excluded from arbitration. Additionally, claims related to obtaining possession of the restaurant or location, breaches of Article 18 of the Franchise Agreement, or for monies due to Benihana will not be subject to arbitration.
For a prospective Benihana franchisee, this means that certain legal claims, particularly those involving intellectual property (Lanham Act) or antitrust issues (Sherman and Clayton Acts), can be pursued in court rather than through arbitration. Similarly, if Benihana seeks to reclaim the restaurant location or pursue unpaid debts, these actions can be litigated in court. This provides franchisees with the potential for greater legal recourse in these specific types of disputes, as court proceedings often allow for more extensive discovery and legal precedents.
It is important for franchisees to understand these exceptions, as they dictate the appropriate forum for resolving different types of disputes. Franchisees should consult with legal counsel to determine the best course of action based on the specific circumstances of any dispute that may arise.