Can shareholders of the Buff City Soap franchisee join in an arbitration proceeding?
Buff_City_Soap Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 69–186)
What This Means (2025 FDD)
According to the 2025 Buff City Soap Franchise Disclosure Document, shareholders of the franchisee, along with immediate family members, owners, heirs, executors, successors, assigns, partners, and guarantors, can join an arbitration proceeding. This applies to any arbitration arising under or related to the Franchise Agreement or any other agreement between the franchisor and franchisee. It also includes disputes regarding the relationship between the franchisor and franchisee, the scope and validity of agreements, and the offer or sale of the franchise opportunity.
However, this right to join arbitration is limited. No party other than the franchisor (including its employees, agents, officers, directors, parent, subsidiary, or affiliated companies) and the franchisee (including the aforementioned related parties) may participate. The arbitrator is not authorized to allow any other person or entity to be involved in the arbitration. This ensures that only the parties directly involved in the franchise relationship can participate in the arbitration process.
Buff City Soap emphasizes that any claim or dispute must be arbitrated on an individual basis and not as a class action or representative action. The franchisee expressly waives any right to arbitrate or litigate as a class action or in a private attorney general capacity. 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 the arbitrator. This clause is meant to prevent franchisees from banding together to bring a single large arbitration case against Buff City Soap.
All arbitrable claims will be finally resolved by binding arbitration in Dallas, Texas, in accordance with the CPR Rules for Non-Administered Arbitration. This means that any disputes that are subject to arbitration must be resolved through this process, and the decision of the arbitrator will be legally binding on both parties. The arbitration will be conducted according to specific rules and procedures, ensuring a structured and fair process for resolving disputes.