Are the results of arbitration final and binding for both the franchisee and Big O Tires?
Big_O_Tires Franchise · 2025 FDDAnswer from 2025 FDD Document
29.02 Arbitration. Except for actions related to or based on the Marks or the copyrights in the Materials or to enforce the provisions of Article 20 of this Agreement, which Big O, may bring in a court of competent jurisdiction, all Claims will be submitted for binding arbitration on demand of either party to either the Judicial Arbiter Group or the AAA, as selected by the party submitting the demand. Notwithstanding the language above, if the action is based on a separate agreement or instrument between Franchisee and Big O, such as a promissory note or lease, the dispute resolution procedure in that agreement or instrument will control rather than this Section 29.02; provided, that, at Big O's sole option, any claim of Big O against Franchisee based on a promissory note executed by Franchisee in favor of Big O may be brought in arbitration in conjunction with a dispute between the parties that is subject to arbitration under this Section, regardless of any provisions to the contrary contained in the promissory note. Arbitration proceedings will be conducted in Denver, Colorado and will be heard by one arbitrator in accordance with the then current rules of AAA that apply to commercial arbitration. The decision as to whether a claim is subject to mandatory arbitration shall be made by an arbitrator, not a court, except that the decision whether the arbitration may proceed as a class action shall be made by the court. The arbitration proceeding and all other hearings shall be conducted in English only, although Franchisee shall have the right, at Franchisee's option and sole expense, to have a translator present at the proceeding or other hearings. The expense of a translator shall not be considered a cost or expense related to an action pursuant to Section 29.07(b) of this Agreement. The parties further agree that, in connection with any such arbitration proceeding, each will file any compulsory counterclaim, as defined by Rule 13 of the Federal Rules of Civil Procedure, within 30 days after the date of the filing of the claim to which it relates. Any party to an arbitration proceeding may apply to the arbitrator for reasonable discovery from the other. In this Agreement "reasonable discovery"
Source: Item 23 — RECEIPTS (FDD pages 102–535)
What This Means (2025 FDD)
According to Big O Tires' 2025 Franchise Disclosure Document, with the exception of actions pertaining to the brand's trademarks, copyrights in its materials, or the enforcement of Article 20, all claims will undergo binding arbitration if either party demands it. This arbitration is conducted through either the Judicial Arbiter Group or the American Arbitration Association (AAA), based on the choice of the party initiating the demand.
The arbitration proceedings will take place in Denver, Colorado, with a single arbitrator overseeing the case in accordance with the AAA's prevailing commercial arbitration rules. An arbitrator, rather than a court, will determine whether a claim is subject to mandatory arbitration. However, the decision regarding whether the arbitration can proceed as a class action will be made by the court.
This means that, outside of specific legal actions Big O Tires might pursue in court, any disputes between Big O Tires and a franchisee will be resolved through arbitration, and the arbitrator's decision will be legally binding on both parties. This process aims to provide a quicker and potentially less expensive alternative to traditional litigation. However, franchisees should be aware that they are giving up their right to sue Big O Tires in court for most disputes and will be bound by the arbitrator's decision.