What arbitration rules and procedures are followed for arbitration proceedings with Bft?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
greement, the arbitrator shall have no authority to issue any relief on any basis other than an individual basis.
The Parties agree that each Party will pay its share of fees and costs in accordance with applicable JAMS rules. If a Party fails to timely pay such fees or costs, the other Party may, in its discretion, advance such costs on behalf of the nonpaying Party. To the extent permitted by applicable law, at the conclusion of the arbitration, the arbitrator shall award to the prevailing Party its fees and costs, including all reasonable experts', attorneys' and other professionals' fees incurred in the proceedings.
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.
The arbitrator shall have full authority to manage any necessary exchange of information among the Parties with a view to achieving an efficient and economical resolution of the dispute. The Parties may only serve reasonable requests for documents, which must be limited to documents upon which a Party intends to rely or documents that are directly relevant and material to a significant disputed issue in the case or to the case's outcome. The document requests shall be restricted in terms of time frame, subject matter and persons or entities to which the requests pertain, and shall not include broad phraseology such as "all documents directly or indirectly related to."
The provisions of this Section are intended to benefit and bind certain third-party non-signatories. The provisions of this Section will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. Any provisions of this Agreement below that pertain to judicial proceedings shall be subject to the agreement to arbitrate contained in this Section.
In the event any portion of this Section is deemed unenforceable, the remainder of this agreement to arbitrate will be enforceable.
The parties to any mediation or arbitration will execute an appropriate confidentiality agreement, excepting only such disclosures and filings as are required by law.
E. Other Proceedings (Right to Injunctive Relief). Nothing in this Agreement, including the provisions of Sections 12.B through 12.D, bars a Party's right to seek and obtain in any court of competent jurisdiction injunctive or other equitable relief against actual or threatened conduct that it believes is likely to cause loss or damage to its trademarks (including the Marks), its proprietary
information, or its systems (including the System), in each case, under customary equity rules, including applicable rules for obtaining restraining orders and injunctions. Each Party agrees that the other may obtain such injunctive relief in addition to such further or other relief as may be available at law or in equity. The Parties agree that the Party seeking injunctive relief pursuant to this Section will not be required to post a bond to obtain injunctive relief and that the only remedy for a Party if an injunction is entered against it will be the dissolution of that injunction, if warranted, upon due hearing (all claims for damages by injunction being expressly waived hereby).
- F. Consent to Jurisdiction. Subject to the obligation to submit to binding arbitration under Section 12.D above, Franchisor and Developer agree that all controversies, disputes, or claims between them or any Franchisor Parties and Developer Parties arising out of or related to this Agreement or any other agreement between a Franchisor Party and a Developer Party or their relationships with each other must be commenced exclusively in state or federal court closest to Franchisor's (or its successor's or assign's, as applicable) then-current principal place of business (currently, Irvine, California), and the Parties irrevocably consent to the jurisdiction of those courts and waive any objection to either the jurisdiction of or venue in those courts.
- G. Waiver of Punitive Damages.
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, several rules and procedures govern arbitration proceedings. Each party involved is bound by any applicable contractual or statutory limitations. Any claim that would be considered a compulsory counterclaim must be submitted within the same proceeding, or it will be permanently barred. The arbitrator is not allowed to consider any settlement discussions or offers made by either party.
The arbitrator has the authority to manage the exchange of information between the parties to ensure an efficient and economical resolution. Document requests must be reasonable and limited to documents that a party intends to rely on or that are directly relevant to a significant disputed issue or the case's outcome. These requests must be restricted in terms of time frame, subject matter, and the persons or entities to which they pertain, avoiding broad language like "all documents directly or indirectly related to." The parties to any mediation or arbitration must execute a confidentiality agreement, with exceptions only for disclosures and filings required by law.
In cases where 75 or more similar arbitration demands are filed within a 30-day period, Bft will organize the demands into randomized groups of no more than 75. JAMS (presumably, a dispute resolution service) will assess one set of filing and administrative fees per group and assign one arbitrator per group. The arbitrator will resolve all arbitrations within a group on an individual basis. The first group of 75 arbitrations will proceed individually, while the remaining cases are stayed, and applicable statutes of limitations are tolled. The parties are expected to complete these initial arbitrations within 120 days after the initial administrative conference and engage in good-faith mediation afterward. If mediation fails, the remaining cases will proceed individually in groups of 75. No final award from an arbitrator in one arbitration will have preclusive effect in any other arbitration. Bft's officers, directors, owners, agents and/or employees are express third-party beneficiaries of the dispute resolution provisions.
These procedures aim to streamline dispute resolution while ensuring fairness and confidentiality. However, the FDD also notes that these arbitration provisions do not prevent a party from seeking injunctive relief in court to protect trademarks or proprietary information. Prospective franchisees should be aware of these specific arbitration rules, particularly the requirements for compulsory counterclaims and the limitations on document requests, as they can significantly impact the arbitration process. Additionally, the grouped arbitration procedure could affect the timing and cost of resolving disputes if a large number of similar claims arise.