Can an arbitrator modify the terms and provisions of the Carbones Pizzeria franchise agreement?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
The arbitrator shall have no authority to add, delete or modify in any manner, the terms and provisions of this Agreement and may not excuse performance of a material term of this Agreement.
However, if an arbitrator determines that any contractual limitations period provided for in this Agreement is not applicable or enforceable, then the parties agree to be bound by the provision of any statute of limitations which would otherwise be applicable to the controversy, dispute or claim which is the subject of any arbitration proceeding initiated hereunder.
The arbitrator is expressly prohibited from determining whether class, mass, collective or consolidated relief is permitted hereunder or from awarding the same.
All findings, judgments, decisions and awards of the arbitrator shall be limited to the dispute or controversy set forth in the written demand for arbitration and response to that demand.
The arbitrator shall issue a reasoned award.
Judgment upon the award of the arbitrator may be entered in any court having jurisdiction thereof.
Source: Item 23 — RECEIPTS (FDD pages 30–116)
What This Means (2025 FDD)
According to the 2025 Carbones Pizzeria Franchise Disclosure Document, an arbitrator does not have the authority to alter the franchise agreement. The document states that the arbitrator cannot add to, delete, or modify any of the terms and provisions outlined in the agreement. Additionally, the arbitrator is not permitted to excuse performance of any material term of the agreement.
This limitation on the arbitrator's power is significant for prospective Carbones Pizzeria franchisees. It means that any disputes that go to arbitration will be decided strictly based on the existing terms of the franchise agreement. The arbitrator must follow the substantive law and the requirements, waivers, and limitations of the agreement. This provides a level of predictability, as the arbitrator cannot introduce new terms or conditions.
However, there is an exception regarding contractual limitations periods. If the arbitrator determines that any contractual limitations period within the agreement is not applicable or enforceable, the parties will be bound by the statute of limitations that would otherwise apply to the dispute. This exception ensures that legal time limits for bringing claims are respected, even if the franchise agreement attempts to shorten them.
Furthermore, the arbitrator is expressly prohibited from determining whether class, mass, collective, or consolidated relief is permitted or from awarding such relief. All findings, judgments, decisions, and awards of the arbitrator must be limited to the specific dispute outlined in the written demand for arbitration and the response to that demand. The arbitrator is required to issue a reasoned award, and judgment upon the award may be entered in any court with jurisdiction.