In Byrider franchise arbitrations, who decides all questions of arbitrability?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
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, all questions regarding the arbitrability of disputes will be determined by the arbitrator. This means that the arbitrator, rather than a court, will decide whether a particular issue is subject to arbitration under the terms of the Franchise Agreement. This includes disputes related to the Franchise Agreement itself, Byrider's relationship with the franchisee, the validity of any agreements, or any System requirement. This is a standard practice in franchise agreements, as it streamlines dispute resolution and keeps costs down.
This clause is significant for prospective Byrider franchisees because it dictates the process for resolving disagreements. By agreeing to arbitration, franchisees waive their right to a trial in court and instead submit to a private dispute resolution process. The arbitrator's decision on arbitrability is crucial, as it determines whether the dispute will be resolved through arbitration or another means, if available.
It is important for potential franchisees to understand the implications of agreeing to arbitration, including the selection of the arbitration organization (JAMS in this case), the location of proceedings (Indianapolis, Indiana metropolitan area), and the governing law (Federal Arbitration Act). Franchisees should seek legal counsel to fully understand their rights and obligations under the arbitration clause.