What rules and procedures govern the arbitration proceedings for Bft disputes?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
ed while the Parties engage in the internal dispute resolution process described in this Section.
- 16.3 Mediation. Except as provided in Section 16.5 below, the Parties agree to submit any claim or dispute that they are unable to resolve informally, as described in Section 16.2 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 Franchisee will share JAMS' and the mediator's fees and costs equally. Neither Party will be required to mediate for more than one (1) day.
16.4 Mandatory Binding Arbitration. If Franchisor waives the obligation to mediate (as described in Section 16.3) or the informal dispute processes described in Sections 16.2 and 16.3 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 Franchisee, or any of its parents, affiliates, and subsidiaries, and its and their respective owners, guarantors, officers, directors, agents, and employees (the "Franchisee 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 Franchisee Parties; (2) the relationships between any Franchisor Parties and Franchisee 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 Franchisee 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. If any Party initiates arbitration or files any counterclaim, it must submit a personally-signed verification therewith. The arbitration proceedings will be conducted by one mutually acceptable arbitrator and, except as this Section otherwise provides, according to JAMS' thencurrent Comprehensive Arbitration Rules & Procedures (see www.jamsadr.com/rules-comprehensivearbitration/) or, if applicable, then-current Mass Arbitration Procedures & Guidelines (see https://www.jamsadr.com/mass-arbitration-procedures). If the Parties are unable to agree on an arbitrator, an arbitrator having at least five (5) years' experience in the areas involved will be appointed by JAMS.
All proceedings will be conducted at a suitable location chosen by the arbitrator that is within 50 miles of Franchisor's (or its successor's or assign's, as applicable) then-current principal place of business (currently, Irvine, California), or via a videoconferencing platform, if both Parties agree. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). The interim and final awards of the arbitrator shall be final and binding upon each Party, and judgment upon the arbitrator's awards may be entered in any court of competent jurisdiction.
The arbitrator has the right to award or include in his or her awards any relief which he or she deems proper, including money damages, pre- and post-award interest, interim costs and attorneys' fees, specific performance, and injunctive relief, provided that the arbitrator may not declare any of the trademarks owned by Franchisor, or its parents, affiliates, and subsidiaries, generic or otherwise invalid, or award any punitive or exemplary damages against any Party to the arbitration proceeding (Franchisor and Franchisee hereby waiving to the fullest extent permitted by law any such right to or claim for any punitive or exemplary damages against any Party to the arbitration proceeding). Except as otherwise stated in this Agreement, 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.
Source: Item 23 — RECEIPTS (FDD pages 79–265)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, disputes are resolved through mandatory binding arbitration managed by JAMS (Judicial Arbitration and Mediation Services). If informal dispute resolution and mediation are unsuccessful, either Bft or the franchisee can demand arbitration. The arbitration will be conducted by one mutually acceptable arbitrator, or one appointed by JAMS with at least five years of experience in the relevant areas. The proceedings follow JAMS' Comprehensive Arbitration Rules & Procedures or, if applicable, their Mass Arbitration Procedures & Guidelines. Any party initiating arbitration or filing a counterclaim must submit a personally-signed verification.
The arbitration location will be within 50 miles of Bft's principal place of business (currently Irvine, California) or via videoconference if both parties agree. The Federal Arbitration Act governs all arbitration matters, superseding any conflicting state laws. The arbitrator can award various forms of relief, including money damages, interest, costs, attorneys' fees, specific performance, and injunctive relief. However, the arbitrator cannot invalidate Bft's trademarks or award punitive or exemplary damages. Each party is responsible for their share of fees and costs as per JAMS rules, although the prevailing party may recover fees and costs, including attorney's fees.
Prospective Bft franchisees should note that they are required to first engage in internal dispute resolution, providing written notice of any claim and attempting to resolve it informally for up to 60 days. If that fails, mediation through JAMS is required before arbitration can be initiated, unless Bft waives mediation. Franchisees must also submit any compulsory counterclaims in the same proceeding, or those claims will be forever barred. The arbitrator has the authority to manage information exchange to ensure an efficient and economical resolution. Franchisees are limited to reasonable document requests that are directly relevant to the disputed issues.
For franchisees, understanding these arbitration procedures is crucial, as it dictates how disputes with Bft will be handled. The FDD specifies a process that includes initial informal resolution, mediation, and then binding arbitration. While arbitration can be more efficient than litigation, franchisees should be aware of the limitations, such as the inability to claim punitive damages and the potential costs involved. The grouped arbitrations clause is also important if many franchisees have similar claims, as it could streamline the process but also means individual cases may be stayed while others proceed. Franchisees should consult with legal counsel to fully understand their rights and obligations under these provisions.