Under what circumstances related to the amount in controversy will Bhc use Streamlined Arbitration Rules and Procedures?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
ies will not be discoverable or admissible in any legal proceeding for any purpose; provided, however, that evidence which is otherwise discoverable or admissible will not be excluded from discovery or admission because of its use in the mediation. The fees charged by a mediator and any other related fees and costs will be divided equally between the parties.
14.2 Arbitration.
- (a) Except as specifically provided in sections 13.2(b) and 13.3(c) above, any Dispute between Franchisor (or its affiliated entities) and Master Franchisee (or its Principal Equity Operators or affiliated entities) not settled through the procedures described in section 14.1 above, or any determination of the scope or applicability of this agreement to arbitrate, will be resolved through binding arbitration by and before JAMS, Inc. ("JAMS"), in accordance with its Streamlined Arbitration Rules and Procedures (if the amount in controversy is less than $250,000 - https://www.jamsadr.com/rulesstreamlined-arbitration/) or its Comprehensive Arbitration Rules and Procedures (if the amount in controversy is $250,000 or more - https://www.jamsadr.com/rules-comprehensive-arbitration/), or if the parties in dispute mutually agree, through binding arbitration by any other mutually agreeable arbitrator. It is explicitly agreed by both of the parties hereto that (i) no arbitration of any Dispute may be commenced except in accordance with this section 14.2 and (ii) any question regarding this section 14.2, including its existence, validity, scope, or termination will be decided by the arbitrator.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, disputes between Bhc and a franchisee (or master franchisee) will be resolved through binding arbitration by JAMS, Inc. The specific rules applied depend on the amount in controversy. If the amount in controversy is less than $250,000, JAMS' Streamlined Arbitration Rules and Procedures will be used. Conversely, if the amount in controversy is $250,000 or more, JAMS' Comprehensive Arbitration Rules and Procedures will be used. However, both parties can mutually agree to use a different arbitrator.
This means that for disputes involving smaller sums (less than $250,000), Bhc franchisees will face a less complex and presumably less costly arbitration process under the Streamlined Rules. For larger disputes, the Comprehensive Rules apply, which may involve more extensive discovery and proceedings. The FDD provides web links to both sets of JAMS rules for further details.
It is important to note that all arbitration hearings will take place at a JAMS location in Los Angeles County, California, or another county where Bhc's headquarters is located. However, Bhc can elect to have the hearing at the JAMS location nearest to the franchisee's principal place of business. The arbitration hearings must commence within six months of filing the demand for arbitration, unless the arbitrator determines exceptional circumstances justify a delay, or all parties agree to a delay.
This arbitration clause dictates not only the process but also the location and timeline for resolving disputes, which could significantly impact a franchisee's costs and convenience depending on their location relative to California. Franchisees should carefully review the JAMS rules and consider the potential implications of arbitrating disputes in California.