Does the Buff City Soap franchise agreement permit class action 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.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, franchisees are prohibited from participating in class action lawsuits against the company. The franchise agreement specifies that any claim or dispute must be arbitrated on an individual basis, explicitly preventing class action or representative actions. Furthermore, claims cannot be consolidated or joined.
This means that a Buff City Soap franchisee waives their right to join with other franchisees to bring a collective legal action against the franchisor. Each franchisee must pursue any legal claims individually. This is a common practice in franchising, as franchisors often prefer to handle disputes on a one-on-one basis rather than facing large class action lawsuits.
The FDD states that any questions regarding the interpretation or enforceability of this prohibition on class-wide or representative arbitration will be resolved by a court of competent jurisdiction, not by the arbitrator. This clarification ensures that the enforceability of the class action waiver itself is subject to judicial review.
This clause has significant implications for prospective Buff City Soap franchisees. It limits their legal recourse options and may increase the financial burden of pursuing a claim against the franchisor, as they cannot share costs with other franchisees. Therefore, it is crucial for potential franchisees to carefully consider this provision and seek legal counsel to understand its full impact.