Does the Bft Development Agreement require mandatory binding arbitration for dispute resolution related to Bft franchises?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
ection 12.B above, to mediation to be conducted by JAMS using its then-current mediation rules and procedures (see www.jamsadr.com/mediation) and to take place at Franchisor's or, as applicable, Franchisor's successor's or assign's, then-current principal place of business (currently, Irvine, California), or via a videoconferencing platform, if both Parties agree. Each Party will bear its own costs in participating in the mediation, and Franchisor and Developer will share JAMS' and the mediator's fees and costs equally. Neither Party will be required to mediate for more than one (1) day.
- 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);
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 Development Agreement mandates binding arbitration in certain situations. If mediation or other informal dispute resolution processes do not resolve a claim to the satisfaction of both parties, then all controversies, disputes, or claims between Bft and the Developer must be submitted for binding arbitration, if either party demands it. This arbitration is managed through JAMS (Judicial Arbitration and Mediation Services).
The disputes subject to mandatory arbitration include those arising out of or related to the Development Agreement, any other agreements between Bft and the Developer, the relationships between Bft and the Developer, the scope or validity of the agreement, or any System Standard. This encompasses a broad range of potential conflicts that could arise during the course of the franchise relationship.
The arbitration proceedings will be conducted by one mutually acceptable arbitrator, following JAMS' Comprehensive Arbitration Rules & Procedures. This means that any legal disputes with Bft would be resolved outside of the court system, which is a fairly standard practice in franchising to provide a potentially faster and more cost-effective resolution. However, franchisees should be aware that arbitration decisions are typically binding and have limited appeal options.