Who can demand binding arbitration with Bft?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
D. Mandatory Binding Arbitration.If Franchisor waives the obligation to mediate (as described in Section 12.C) or the informal dispute processes described in Sections 12.B and 12.C do not resolve the claim or dispute to the Parties' satisfaction, all controversies, disputes, or claims between Franchisor, or any of its parents, affiliates, and subsidiaries, and its and their respective owners, officers, directors, agents, and employees (the "Franchisor Parties"), on the one hand, and Developer, or any of its parents, affiliates, and subsidiaries, and its and their respective owners, guarantors, officers, directors, agents, and employees (the "Developer Parties"), on the other hand, arising out of or related to: (1) this Agreement or any other agreement between any of the Franchisor Parties and Developer Parties; (2) the relationships between any Franchisor Parties and Developer Parties; (3) the scope or validity of this Agreement or any other agreement referenced in clause (1) above or any provision of any of such agreements (including the validity and scope of the arbitration provision under this Section, which Franchisor and Developer acknowledges is to be determined by an arbitrator, not a court); or (4) any System Standard, must be submitted for binding arbitration, on demand of either Party, to JAMS.
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, either the Franchisor Parties or the Developer Parties can demand binding arbitration. The Franchisor Parties include Bft, its parents, affiliates, subsidiaries, and their respective owners, officers, directors, agents, and employees. The Developer Parties include the franchisee (referred to as Developer in this section), its parents, affiliates, subsidiaries, and their respective owners, guarantors, officers, directors, agents, and employees.
This means that a wide range of individuals and entities affiliated with either Bft or the franchisee can initiate the arbitration process. This encompasses not only the primary contracting parties but also related entities and individuals who may be involved in disputes. The disputes subject to arbitration include those arising out of the franchise agreement, other agreements between the parties, the relationships between the parties, the scope or validity of the agreements, or any System Standard.
This mandatory binding arbitration clause means that franchisees waive their right to sue Bft in court and instead must resolve disputes through arbitration. Arbitration is generally faster and less expensive than litigation, but it also involves limitations on discovery and appeal rights. Prospective franchisees should understand who is bound by this arbitration clause and the types of disputes that are subject to arbitration. Franchisees should consult with an attorney to fully understand the implications of this clause.