In Byrider franchise arbitration, what happens to claims that would constitute compulsory counterclaims if they are not submitted or filed in the same proceeding?

According to Byrider's 2025 Franchise Disclosure Document, if a franchisee or Byrider fails to submit a claim that would be considered a compulsory counterclaim, as defined by Rule 13 of the Federal Rules of Civil Procedure, within the same arbitration proceeding as the original claim, that claim is permanently barred. This means the arbitrator will not consider the claim, and the party forfeits the right to pursue it.

This provision is significant for prospective Byrider franchisees because it emphasizes the importance of identifying and presenting all related claims during the initial arbitration process. Failure to do so could result in the loss of the ability to pursue those claims in the future. Franchisees should consult with legal counsel to ensure all potential counterclaims are properly identified and filed within the required timeframe.

This requirement aims to promote efficiency and finality in dispute resolution. By requiring all related claims to be addressed in a single proceeding, Byrider seeks to avoid piecemeal litigation and ensure that all issues between the parties are resolved comprehensively. Franchisees need to be diligent in assessing all potential claims and defenses at the outset of any dispute to avoid inadvertently waiving their rights.