Is the remedy recommended by the arbitration panel in the C12 Group dispute resolution binding?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
| u. Dispute resolution by arbitration or mediation | XII, Exhibit F | All matters can be appealed up through C12’s defined three-step dispute resolution process which culminates in Christian arbitration pursuant to which the parties engage three Bible-believing Christian arbitrators as follows: one selected by the franchisee, one selected by C12, and one selected by such two arbitrators. The remedy recommended by the arbitration panel will be binding and final with no further recourse by either party. Subject to state law. |
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Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 40–41)
What This Means (2025 FDD)
According to C12 Group's 2025 Franchise Disclosure Document, the remedy recommended by the arbitration panel is binding and final. The FDD outlines a three-step dispute resolution process that culminates in Christian arbitration. This process involves the franchisee and C12 Group each selecting one arbitrator, and those two arbitrators then selecting a third.
This means that once the panel of three arbitrators makes a recommendation, both C12 Group and the franchisee are obligated to follow it. The document explicitly states that there is "no further recourse by either party," indicating that neither party can appeal the decision. However, this is subject to state law, meaning that specific state regulations could potentially impact the enforceability of the arbitration decision.
For a prospective C12 Group franchisee, this highlights the importance of carefully considering any potential disputes and understanding the implications of agreeing to binding arbitration. While arbitration can be a faster and less expensive alternative to litigation, the franchisee gives up the right to appeal the arbitrator's decision, making the selection of a competent and fair arbitrator crucial. Franchisees should also be aware of how state laws might affect this process.