Is the Black Bear Diner agreement subject to the Federal Arbitration Act?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Arbitration. This Agreement is a written agreement evidencing a transaction involving commerce and is, therefore, subject to the terms and provisions of the Federal Arbitration Act, Title 9 of the United States Code. All disputes arising out of or relating to this Agreement, or to any other agreements between the parties or with regard to interpretation, formation or breach of this or any other agreement between the parties, shall be settled by binding arbitration conducted in Redding, California, or such place as may be mutually agreeable to the parties, in accordance with the Commercial Arbitration Rules of the American Arbitration Association then in effect. or at such other place as may be mutually agreeable to the parties. The decision of the arbitrators will be final and binding on all parties to the dispute; however, the arbitrators may not under any circumstances: (i) stay the effectiveness of any pending termination of this Agreement; (ii) assess punitive or exemplary damages; or (iii) make any award which extends, modifies or suspends any lawful term of this Agreement or any reasonable standard of business performance. A judgment may be entered upon the arbitration award by any state or federal court in California or the state within which the Development Area is located. The prevailing party in any action or proceeding arising under, out of, in connection with, or in relation to this Agreement or the Black Bear Diner restaurant conducted pursuant to this Agreement shall be entitled to recover its reasonable attorneys' fees and costs.
DEVELOPER EXPRESSLY ACKNOWLEDGES THAT DEVELOPER HAS READ THE TERMS OF THIS BINDING ARBITRATION PROVISION AND SPECIFICALLY AFFIRMS THAT THIS PROVISION IS ENTERED INTO WILLINGLY AND VOLUNTARILY AND WITHOUT ANY FRAUD, DURESS OR UNDUE INFLUENCE ON THE PART OF FRANCHISOR OR ANY OF FRANCHISOR'S AGENTS OR EMPLOYEES.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, the franchise agreement is subject to the Federal Arbitration Act. The agreement is considered a written agreement involving commerce and thus falls under the jurisdiction of the Federal Arbitration Act, Title 9 of the United States Code. This means that any disputes arising from the agreement, or other agreements between the parties, including those related to interpretation, formation, or breach, will be settled through binding arbitration.
The arbitration will be conducted in Redding, California, or another mutually agreed-upon location, following the Commercial Arbitration Rules of the American Arbitration Association. The arbitrator's decision will be final and binding. However, the arbitrator is restricted from staying the termination of the agreement, assessing punitive damages, or modifying any lawful term of the agreement or reasonable business performance standards. A judgment on the arbitration award can be entered in any state or federal court in California or the state where the Development Area is located.
The prevailing party in any legal action related to the agreement or the Black Bear Diner restaurant will be entitled to recover reasonable attorney's fees and costs. The developer acknowledges having read and understood the binding arbitration provision, affirming that they enter into it willingly and voluntarily, without any fraud, duress, or undue influence from Black Bear Diner or its agents.