Does the Byrider agreement to arbitrate extend to disputes regarding the validity of any agreement between Byrider and the franchisee?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
ARBITRATION
19.1 Arbitration.
The parties agree that all controversies, disputes, or claims between Company and its affiliates, and their respective shareholders, officers, directors, agents, and/or employees, and Franchisee (and/or Franchisee's owners, guarantors, affiliates, and/or employees) arising out of or related to:
- (1) this Agreement or any other agreement between the parties;
- (2) Company's relationship with Franchisee;
- (3) the validity of this Agreement or any other agreement between the parties or any provision of any such agreements (including validity and scope of the arbitration
obligations under this Section, which the parties acknowledge are to be determined by an arbitrator, not a court); or
(4) any System requirement;
must be submitted for binding arbitration, on demand of either party, to Judicial Arbitration and Mediation Service ("JAMS") or its successor (or an organization designated by JAMS or its successor). All questions of arbitrability shall be determined by the arbitrator. The arbitration proceedings will be conducted by one arbitrator and, except as this Subsection otherwise provides, according to the then current arbitration rules of JAMS. All proceedings will be conducted at a suitable location chosen by the arbitrator in the Indianapolis, Indiana metropolitan area. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). Judgment upon the arbitrator's award may be entered in any court of competent jurisdiction.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, the arbitration agreement between Byrider and its franchisees extends to disputes regarding the validity of any agreement between the parties. Specifically, the agreement covers controversies, disputes, or claims arising out of or related to the validity of the Franchise Agreement or any other agreement between Byrider and the franchisee. This includes disputes over any provision within those agreements. The arbitrator, not a court, will determine the validity and scope of the arbitration obligations.
This means that if a franchisee questions the enforceability or legality of any part of their franchise agreement or any other agreement with Byrider, they must resolve the issue through binding arbitration rather than through a lawsuit in court. This can include challenges to specific clauses, the entire agreement, or related documents. The arbitration proceedings will be conducted by one arbitrator according to the rules of the Judicial Arbitration and Mediation Service (JAMS) in the Indianapolis, Indiana metropolitan area, unless otherwise specified.
This arbitration clause is broad in scope, requiring almost all disputes to be resolved outside of court. While arbitration can sometimes be a faster and more cost-effective method of dispute resolution, it also limits a franchisee's access to the court system and the right to a jury trial. The arbitrator's decision is binding and can only be challenged in limited circumstances. Prospective franchisees should carefully consider the implications of this arbitration provision and consult with legal counsel to understand their rights and obligations.