Under the Big Apple Bagels franchise agreement, which arbitration rules govern the proceedings?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
G. Mandatory and Binding Arbitration.
- (1) All disputes, controversies or claims arising out of or relating to this Agreement 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.
- (2) 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, provided that the arbitrator shall not have the authority to award exemplary or punitive damages, nor shall he have jurisdiction over any dispute relating the ownership, validity or registration of any name or Mark licensed hereunder. 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.
Source: Item 23 — RECEIPTS (FDD pages 87–319)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, disputes arising from the franchise agreement are subject to mandatory and binding arbitration. The arbitration process is initiated through the American Arbitration Association (AAA) upon demand by either party. The proceedings will be conducted in the major city nearest to the franchisor's principal business address, utilizing one arbitrator and following the then-current Commercial Arbitration Rules of the AAA. The Federal Arbitration Act governs all matters within its scope.
The arbitrator has the authority to award appropriate relief, including monetary damages (with interest), specific performance, injunctive relief, and attorneys' fees and costs. However, the arbitrator cannot award exemplary or punitive damages and lacks jurisdiction over disputes related to the ownership, validity, or registration of any licensed name or mark. The arbitrator's decision is conclusive and binding, and judgment upon the award may be entered in any court of competent jurisdiction. Each party waives the right to contest the validity or enforceability of the award.
Both parties must adhere to any limitations on the time period for bringing claims and must submit any compulsory counterclaims as defined by Rule 13 of the Federal Rules of Civil Procedure within the same proceeding. Failure to submit a compulsory counterclaim in the proceeding will result in the claim being barred. For franchisees in Illinois, any provision in the Big Apple Bagels Franchise Agreement that designates jurisdiction and venue in a forum outside of Illinois is void; however, a Big Apple Bagels Franchise Agreement may provide for arbitration to take place outside of Illinois.