Does the Carvel franchise agreement allow for consolidation of arbitration proceedings?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. Individual Actions. We and you agree that arbitration will be conducted on an individual, not a class-wide, basis and that an arbitration proceeding between us and you may not be consolidated with any other arbitration proceeding between us and any other person. Notwithstanding the foregoing or anything to the contrary in this Section 19.1, if any court or arbitrator determines that this prohibition on class-wide arbitration is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 19.1, then the parties agree that this arbitration clause shall not apply to that dispute and that such dispute will be resolved in a judicial proceeding in accordance with Section 19.1.D. (Excepted Disputes).
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the franchise agreement does not allow for consolidation of arbitration proceedings. Carvel and the franchisee agree that arbitration will be conducted on an individual basis, not a class-wide basis. An arbitration proceeding between Carvel and a franchisee cannot be consolidated with any other arbitration proceeding between Carvel and any other person.
However, there is an exception to this rule. If any court or arbitrator determines that the prohibition on class-wide arbitration is unenforceable with respect to a dispute that would otherwise be subject to arbitration, then the arbitration clause will not apply to that dispute. In this case, the dispute will be resolved in a judicial proceeding.
This means that franchisees are generally required to pursue any disputes with Carvel individually through arbitration, which can be more costly and time-consuming than participating in a class action. However, the enforceability of this provision is subject to judicial review, and a court may find it unenforceable in certain circumstances, potentially allowing for class-wide arbitration or judicial proceedings.