In an arbitration involving Bft, can the arbitrator consider settlement discussions or offers made by any party?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
In any arbitration proceeding, each Party will be bound by the provisions of any applicable contractual or statutory limitations provision, whichever expires earlier. Each Party must submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding. Any claim which is not submitted or filed as required will be forever barred. The arbitrator may not consider any settlement discussions or offers that might have been made by any Party.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the arbitrator in any arbitration proceeding is restricted from considering settlement discussions or offers made by either party. This means that any attempts to resolve the dispute through negotiation or compromise prior to the arbitration hearing will not be taken into account by the arbitrator when making a decision.
This provision could impact a prospective franchisee by limiting the scope of evidence that can be presented during arbitration. It prevents the arbitrator from being influenced by previous settlement attempts, potentially leading to a decision based solely on the formal arguments and evidence presented during the arbitration itself. Franchisees should be aware that any offers or discussions held before arbitration will not be a factor in the arbitrator's decision.
This type of restriction is not uncommon in franchise agreements, as franchisors often seek to maintain a level playing field and ensure that all disputes are resolved based on the merits of the case as presented during the arbitration process. However, it is important for franchisees to understand this limitation and to prepare their case accordingly, focusing on the evidence and arguments that will be most persuasive to the arbitrator, without relying on prior settlement discussions.