Does the Big Apple Bagels agreement allow for class-wide arbitration?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- iii. Franchisor and Franchisee agree that arbitration shall be conducted on an individual, not a class-wide, basis, that only Franchisor (and its affiliates and their respective owners, officers, directors, agents and employees, as applicable) and Franchisee (and its affiliates and their respective owners, officers and directors, as applicable) may be the parties to any arbitration proceeding described in this Section, and that no such arbitration proceeding shall be consolidated with any other arbitration proceeding
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to the 2025 Big Apple Bagels Franchise Disclosure Document, the franchise agreement does not allow for class-wide arbitration. The agreement specifies that arbitration must be conducted on an individual basis. This means that each franchisee must pursue any disputes with Big Apple Bagels separately, and they cannot join together to file a class-wide arbitration claim.
The agreement explicitly states that only Big Apple Bagels (including its affiliates, owners, officers, directors, agents, and employees) and the franchisee (including its affiliates, owners, and directors) can be parties to any arbitration proceeding. This reinforces the prohibition against class-wide arbitration, ensuring that disputes are handled on a one-to-one basis.
This clause has significant implications for prospective franchisees. It prevents them from collectively addressing issues with the franchisor, potentially increasing the individual cost and complexity of resolving disputes. While individual arbitration can still provide a means of resolution, the inability to participate in a class-wide action may limit a franchisee's leverage and resources in pursuing claims against Big Apple Bagels.