Does the Bhc agreement allow for class action lawsuits or arbitrations?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL CLAIMS BROUGHT UNDER THIS AGREEMENT WILL BE BROUGHT IN AN INDIVIDUAL CAPACITY.
THIS AGREEMENT MAY NOT BE CONSTRUED TO ALLOW OR PERMIT THE CONSOLIDATION OR JOINDER OF OTHER CLAIMS OR CONTROVERSIES INVOLVING ANY OTHER FRANCHISEES OR PERMIT SUCH CLAIMS OR CONTROVERSIES TO PROCEED AS A CLASS ACTION, CLASS ARBITRATION, COLLECTIVE ACTION, OR ANY SIMILAR REPRESENTATIVE ACTION.
NO ARBITRATOR WILL HAVE THE AUTHORITY UNDER THIS AGREEMENT TO ORDER ANY SUCH CLASS OR REPRESENTATIVE ACTION.
BY SIGNING BELOW, FRANCHISEE EXPRESSLY AGREES TO WAIVE ALL SUBSTANTIVE AND PROCEDURAL RIGHTS THAT IT MAY HAVE TO BRING AN ACTION ON A CLASS, COLLECTIVE, REPRESENTATIVE OR OTHER SIMILAR BASIS.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, franchisees are restricted from participating in class action lawsuits or arbitrations against the company. The agreement specifies that all claims must be brought in an individual capacity, and it explicitly prohibits the consolidation or joining of claims involving other franchisees.
This means that a Bhc franchisee cannot participate in a class action lawsuit against Bhc, nor can they consolidate their claims with other franchisees in arbitration. This waiver extends to all substantive and procedural rights related to bringing an action on a class, collective, or representative basis. The arbitrator does not have the authority to order any class or representative action.
This clause is intended to prevent franchisees from uniting to bring large-scale legal actions against Bhc. While individual franchisees retain the right to pursue claims, they must do so independently, bearing the full cost and risk of litigation or arbitration. This could potentially disadvantage franchisees who may have limited resources compared to the franchisor. It is a fairly common practice in franchising to include such clauses, as franchisors seek to avoid large, coordinated legal challenges.
Prospective franchisees should carefully consider this provision and understand that they are waiving their right to participate in class actions against Bhc. They should also be aware that this restriction could impact their ability to seek redress if they experience similar issues as other franchisees within the Bhc system. It is advisable to seek legal counsel to fully understand the implications of this waiver before signing the franchise agreement.