What law applies to the arbitration proceedings for Black Bear Diner franchise disputes?
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.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, the Federal Arbitration Act governs arbitration proceedings. Specifically, Title 9 of the United States Code applies because the franchise agreement is considered a written agreement involving commerce.
This means that any disputes arising from the franchise agreement, or other agreements between the franchisee and Black Bear Diner, will be subject to binding arbitration. The arbitration will be conducted according to the Commercial Arbitration Rules of the American Arbitration Association (AAA), either in Redding, California, or another mutually agreed-upon location.
It is important to note that the arbitrators' decision is final and binding. However, the arbitrators are limited in their powers; they cannot stay a pending termination of the agreement, award punitive or exemplary damages, or modify any lawful term of the agreement. 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 is entitled to recover reasonable attorney's fees and costs.