Is a Buona developer allowed to consolidate an arbitration proceeding involving Buona with another arbitration of any kind?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
Further, neither Franchisor nor Developer shall attempt to consolidate or otherwise combine in any manner, an arbitration proceeding involving Franchisor and Developer with another arbitration of any kind, nor shall Franchisor or Developer attempt to certify a class or participate as a party in a class action against the other.
(b) The foregoing notwithstanding, in the event Developer controls, is controlled by, or is in active concert with another developer of Franchisor, or there is a guarantor of some or all of Developer's obligations to Franchisor, then the joinder of those parties to any arbitration between Franchisor and Developer shall be permitted, and in all events, the joinder of an owner, director, officer, member, manager, partner or other representative or agent of Franchisor or Developer shall be permitted.
12.6 Governing Law/Consent to Jurisdiction.
All arbitration proceedings between Franchisor and Developer shall be governed by the Federal Arbitration Act ("FAA") and no procedural arbitration issues are to be resolved pursuant to any state statutes, regulations or common law.
Except to the extent governed by the FAA, the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, a developer is generally prohibited from consolidating an arbitration proceeding involving Buona with any other arbitration. This means that if a dispute arises that goes to arbitration, the developer cannot combine that arbitration with any other separate arbitration, ensuring that each dispute is handled individually. This restriction applies equally to Buona, preventing them from consolidating arbitrations as well.
However, there are exceptions to this rule. If the developer is controlled by, controls, or is working in concert with another Buona developer, then joining those parties in the arbitration is permitted. Additionally, the joinder of an owner, director, officer, member, manager, partner, or other representative or agent of either Buona or the developer is allowed. This exception seems designed to address situations where multiple parties are closely related or involved in the same dispute, allowing for a more efficient resolution.
This clause aims to keep arbitration proceedings focused and manageable, preventing complex entanglements with unrelated disputes. For a prospective Buona developer, this means understanding that any arbitration will be handled on an individual basis unless they fall under the specific exceptions outlined in the agreement. It is important to note that the Federal Arbitration Act governs all arbitration proceedings between Buona and the developer, and Illinois law governs the interpretation of the agreement except to the extent governed by the FAA or other federal law.