If arbitration is pursued for a Brain Balance franchise dispute, where will the American Arbitration Association office be located?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
20.01. Except as provided in Section 20.02 below, COMPANY and FRANCHISEE agree that any and all disputes between them, and any claim by either party that cannot be amicably settled (including tort as well as contract claims, claims based upon any federal, state, or local statute, law, order, ordinance, or regulations, and claims arising from any relationship prior to, at the time of entering, during the term of, or upon or after expiration or termination of this Agreement) except for claims relating to the Marks or other service marks or commercial symbols of COMPANY, shall be determined solely and exclusively by arbitration under the Federal Arbitration Act, as amended, and in accordance with the rules then obtaining of the American Arbitration Association or any successor at its office located in San Francisco, ou, unless the parties otherwise agree in writing. COMPANY and FRANCHISEE consent to personal jurisdiction and hereby waive all objections to personal jurisdiction or venue for the purpose of carrying out the purposes of this Paragraph 20.01. The arbitrator(s) may not under any circumstance: (i) stay the effectiveness of any pending termination; (ii) assess punitive, speculative, or exemplary damages; or (iii) make any award that extends, modifies, or suspends any lawful term of this Agreement or any reasonable standard of business performance set by COMPANY in good faith. The arbitrator(s) shall be limited to the issues in dispute between COMPANY and FRANCHISEE and a dispute between any other franchisee and COMPANY shall not be considered in the same arbitration proceeding or by the same arbitrator(s). The parties shall each bear their own expense, including but not limited to all fees and expenses of the arbitrator(s), the American Arbitration Association, attorneys, and accountants. Judgment upon any award of the arbitrator(s) shall be conclusive and binding and shall be entered in a court of competent jurisdiction.
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, any disputes between Brain Balance and a franchisee that cannot be settled amicably will be determined by arbitration. This arbitration will occur under the Federal Arbitration Act, as amended, and will follow the rules of the American Arbitration Association (or any successor). Unless both parties agree otherwise in writing, the American Arbitration Association office used for arbitration will be located in San Francisco.
This means that if a Brain Balance franchisee has a dispute with the company, such as a disagreement over the terms of the franchise agreement, and they cannot resolve it through informal negotiation, they may have to go through arbitration. The location of the arbitration in San Francisco could mean added travel and expenses for franchisees located elsewhere.
However, the arbitrator is limited in what they can do. They cannot halt a pending termination, award punitive damages, or change any terms of the franchise agreement. The arbitrator can only consider the specific issues in dispute between the franchisee and Brain Balance, and cannot consider disputes involving other franchisees. Each party is responsible for their own expenses, including fees for the arbitrator, the American Arbitration Association, attorneys, and accountants. The arbitrator's decision is final and binding and can be enforced in a court of law.