Under what circumstances related to class-wide arbitration will the arbitration clause not apply to a dispute with Carvel?
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 standard arbitration clause will not apply if a court or arbitrator determines that the prohibition on class-wide arbitration is unenforceable. In such a case, the dispute will be resolved in a judicial proceeding. Carvel and the franchisee agree that arbitration will be conducted on an individual basis, and proceedings cannot be consolidated with other arbitrations involving Carvel and other parties.
This means that if a franchisee attempts to bring a class-wide arbitration claim against Carvel, and a court or arbitrator deems the prohibition on such class-wide arbitrations unenforceable, the dispute will then be resolved through litigation in court rather than through arbitration. This clause aims to prevent Carvel from being subjected to class-wide arbitration, but provides a contingency if the prohibition is deemed unenforceable.
For a prospective franchisee, this is important to understand because it outlines the process for resolving disputes with Carvel. While Carvel prefers individual arbitration, the clause acknowledges the possibility of court proceedings if the class-wide arbitration prohibition is struck down. Franchisees should be aware of the implications of this clause and consider seeking legal counsel to fully understand their rights and obligations regarding dispute resolution with Carvel.