What arbitration rules govern disputes under the Big Apple Bagels franchise agreement?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
l. Mandatory and Binding Arbitration.
- i. All disputes, controversies or claims arising out of or relating to this Agreement, except for issues relating to the ownership, validity or registration of any name or Mark licensed hereunder, shall be submitted for arbitration to the American Arbitration Association on demand of either party. The demand shall be submitted to, and the arbitration proceedings shall be conducted in the major city nearest where Franchisor's principal business address is then located, and shall be heard by one arbitrator in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association. All matters within the scope of the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.) shall be governed by it. This provision shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
- ii. The arbitrator shall have the right to award or include in his award any relief which he deems proper in the circumstances, including, without limitation, money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief and attorneys' fees and costs, in accordance with Paragraph 18.d., provided that the arbitrator shall not have the authority to award exemplary or punitive damages. The award and decision of the arbitrator shall be conclusive and binding upon all parties hereto and judgment upon the award may be entered in any court of competent jurisdiction. Each party waives any right to contest the validity or enforceability of such award. The parties agree to be bound by the provisions of any limitation on the period of time by which claims must be brought. The parties further agree that, in connection with any such arbitration proceeding, each shall 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 as the claim to which it relates. Any such claim which is not submitted or filed in such proceeding shall be barred.
- 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 Big Apple Bagels' 2025 Franchise Disclosure Document, disputes arising from the franchise agreement will be settled through mandatory and binding arbitration, except for issues concerning the ownership, validity, or registration of licensed names or marks. The arbitration will be managed by the American Arbitration Association, following its Commercial Arbitration Rules. The proceedings will occur in the major city nearest to Big Apple Bagels' principal business address, using a single arbitrator. The Federal Arbitration Act will govern all matters within its scope. This arbitration clause remains effective even after the franchise agreement expires or terminates.
The arbitrator has the authority to award appropriate relief, including monetary damages (with interest), specific performance, injunctive relief, and attorneys' fees and costs, but cannot award exemplary or punitive damages. The arbitrator's decision is final and binding, and each party waives the right to challenge its validity or enforceability. Both parties must adhere to any limitations on the time period for bringing claims and must submit any compulsory counterclaims as defined by the Federal Rules of Civil Procedure within the same proceeding, or those claims will be barred.
Furthermore, arbitration will be conducted on an individual basis, not as a class action. Only Big Apple Bagels (including its affiliates, owners, officers, directors, agents, and employees) and the franchisee (including their affiliates, owners, officers, and directors) can be parties to the arbitration. Consolidation with other arbitration proceedings is not allowed. For franchisees in Illinois, any provision designating jurisdiction and venue outside of Illinois is void; however, arbitration may take place in Illinois, according to the Illinois Franchise Disclosure Act.