Does the Bhc franchise 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, the franchise agreement includes stipulations regarding dispute resolution through arbitration and explicitly prohibits class action lawsuits. Specifically, all claims must be brought in an individual capacity, and the agreement cannot be interpreted to allow the consolidation or joining of claims involving other franchisees. This extends to class arbitrations, collective actions, or any similar representative actions.
This means that as a Bhc franchisee, you waive any rights to participate in a class action against Bhc. You are limited to pursuing claims against Bhc individually. This waiver covers both substantive and procedural rights related to class, collective, or representative actions.
Furthermore, the arbitrator in any dispute is not authorized to order any class or representative action. This clause is designed to prevent franchisees from uniting to bring a single, large claim against Bhc, which is a common practice in franchising to manage legal risks. This arrangement is generally unfavorable for franchisees, who may have limited resources to pursue individual legal claims compared to participating in a class action. Prospective franchisees should carefully consider this clause and its implications for their legal rights before investing in a Bhc franchise.