Can disputes regarding the validity of the Buff City Soap franchise agreement be resolved through arbitration?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
For resolution of any claim that is not subject to mandatory arbitration under Section 26(c)(1), such claim will be resolved in the Chosen Forum in accordance with Section 26(d).
- (3) No Class Action.
No party except Franchisor (including its employees, agents, officers or directors and its parent, subsidiary or affiliated companies) and Franchisee (including where applicable the immediate family members, owners, heirs, executor, successors, assigns, shareholders, partners, and guarantors (as applicable) may join in or become a party to any arbitration proceeding arising under or related to this Agreement or any other agreement between Franchisor and Franchisee, the relationship between Franchisor and Franchisee, the scope and validity of this Agreement or any other agreement between Franchisor and Franchisee, specifically including whether any specific claim is subject to arbitration at all (i.e. arbitrability questions) and/or the offer or sale of the franchise opportunity; and further, the arbitrator will not be authorized to permit any person or entity that is not a Party to this Agreement or identified in this paragraph to be involved in or to participate in any arbitration conducted pursuant to this Agreement.
No matter how styled by the party bringing the claim, any claim or dispute is to be arbitrated on an individual basis and not as a class action or representative action, and further, no claim may be consolidated or joined. FRANCHISEE EXPRESSLY WAIVES ANY RIGHT TO ARBITRATE OR LITIGATE AS A CLASS ACTION OR IN A PRIVATE ATTORNEY GENERAL CAPACITY.
Any question regarding the interpretation or enforceability of this prohibition on class-wide or representative arbitration will be resolved by a court of competent jurisdiction, and not the arbitrator.
- (4) Binding Arbitration in Dallas, Texas.
Subject to the provision for temporary injunctive relief pending arbitration contained in Section 26(c)(5), all Arbitrable Claims will be finally resolved by binding arbitration in accordance with the CPR Rules for Non-Administered Arbitration (the "CPR Rules") then currently in effect.
All Arbitrable Claims will be decided by one arbitrator chosen from the Panels of Distinguished Neutrals maintained by the International Institute for Conflict Prevention & Resolution ("CPR") in accordance with Rules 5.3 and 6 of the CPR Rules.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, disputes regarding the validity of the franchise agreement can be resolved through arbitration. Specifically, any claim that is not subject to mandatory arbitration will be resolved in the Chosen Forum.
Buff City Soap mandates that arbitration be conducted on an individual basis, explicitly prohibiting class action or representative action lawsuits. The Franchisee expressly waives any right to arbitrate or litigate as a class action or in a private attorney general capacity. This means a franchisee cannot join with other franchisees to bring a single, consolidated claim against Buff City Soap.
Any questions regarding the interpretation or enforceability of the prohibition on class-wide or representative arbitration will be resolved by a court of competent jurisdiction, and not the arbitrator. All arbitrable claims will be finally resolved by binding arbitration in accordance with the CPR Rules for Non-Administered Arbitration. The arbitration will occur in Dallas, Texas, with one arbitrator chosen from the Panels of Distinguished Neutrals maintained by the International Institute for Conflict Prevention & Resolution.
This arbitration clause is a significant legal provision. It restricts a franchisee's ability to pursue collective legal action against Buff City Soap, potentially increasing the individual cost and complexity of resolving disputes. Prospective franchisees should carefully consider these limitations and seek legal counsel to fully understand their implications.