What happens if a claim is not submitted or filed as required in an arbitration proceeding involving Bft?
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.
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.
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, if a party fails to submit or file a claim as required in an arbitration proceeding, that claim will be permanently barred. This applies specifically to any claim that would be considered a compulsory counterclaim under Rule 13 of the Federal Rules of Civil Procedure.
This means a Bft franchisee must ensure all relevant claims and counterclaims are included in the initial arbitration proceedings. Failure to do so results in the franchisee losing the right to pursue those claims in the future. This requirement encourages franchisees to be thorough and comprehensive when presenting their case during arbitration.
Furthermore, the arbitrator is not allowed to consider any settlement discussions or offers made by either party during the arbitration. This ensures the decision is based solely on the merits of the submitted claims and evidence, rather than on previous negotiation attempts. This clause promotes a focus on the formal arbitration process and the facts presented.
This provision is intended to benefit and bind third-party non-signatories and will remain in effect even after the agreement expires or terminates. This ensures that the arbitration agreement remains enforceable even after the franchise relationship ends.