What relief is the arbitrator permitted to award in a dispute involving a Carvel franchise?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
authority to select a different hearing locale. All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.).
- 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).
- C. Relief. The arbitrator has the right to award or include in his or her award any relief which he or she deems proper, including money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees and costs, provided that
the arbitrator may not declare any Mark generic or otherwise invalid or, except as expressly provided in Section 19.1.F.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, an arbitrator in a dispute has the authority to award various forms of relief. This includes money damages, with interest applied to unpaid amounts starting from the date they were due. The arbitrator can also order specific performance, which compels a party to fulfill their contractual obligations, and grant injunctive relief, which is a court order that requires a party to do or refrain from doing specific acts. Additionally, the arbitrator can award attorneys' fees and costs to the prevailing party.
However, there are limitations to the arbitrator's power. The arbitrator cannot declare any of Carvel's trademarks generic or invalid. Furthermore, the arbitrator is generally prohibited from awarding special, consequential, exemplary, or punitive damages against either party. Both Carvel and the franchisee waive their rights to claim such damages to the fullest extent permitted by law.
It's important to note that the arbitrator can award interest on damages incurred due to a breach of the agreement. This interest can be applied from the date the damages were incurred and continue until the award is paid in full. The interest rate will be determined by the arbitrator but cannot be less than 2.5% per annum above the Citibank Preference Rate as reported in The Wall Street Journal, or the maximum rate permitted by applicable law, whichever is lower. This ensures that the franchisee is compensated for any financial losses incurred due to the other party's actions, while also preventing excessive or punitive financial burdens.