Who may be parties to any Cd One Price Cleaners arbitration proceeding?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor and Franchisee agree that arbitration shall be conducted on an individual, not a class-wide, basis, that only Franchisor (and its affiliates and their respective owners, officers, agents and employees, as applicable) and Franchisee (and its affiliates and their respective owners, officers, directors, agents and employees, as applicable) may be the parties to any arbitration proceeding described in this Section, and that no such arbitration proceeding shall be consolidated with any other arbitration proceeding involving Franchisor and/or any other natural person, association, corporation, partnership, limited liability company or other entity. Notwithstanding the foregoing or anything to the contrary in this Section or Section 22.1, if any court or arbitrator determines that all or any part of the preceding sentence is unenforceable with respect to a dispute that otherwise would be subject to arbitration under this Section 23.2, then all parties agree that this arbitration clause shall not apply to that dispute and that such dispute shall be resolved in a judicial proceeding in accordance with this Article 23 (excluding this Section 23.2).
The provisions of this Section are intended to benefit and bind certain third party non-signatories and will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 23 — Receipts (FDD pages 72–263)
What This Means (2025 FDD)
According to the 2025 Cd One Price Cleaners FDD, arbitration proceedings will be limited to specific parties. Only Cd One Price Cleaners (including its affiliates, owners, officers, agents, and employees) and the franchisee (including its affiliates, owners, officers, directors, agents, and employees) can be parties in any arbitration proceeding. This means that disputes will be handled on an individual basis.
This clause prevents franchisees from consolidating their arbitration cases or pursuing class-wide arbitration against Cd One Price Cleaners. Each franchisee must address their disputes individually. This can be a disadvantage for franchisees, as it prevents them from combining resources and sharing costs in disputes against the franchisor.
However, there is an exception: if a court or arbitrator deems the restriction on class-wide arbitration unenforceable, then the arbitration clause will not apply to the dispute, and it will be resolved in a judicial proceeding. This provides a potential avenue for franchisees to pursue collective action if the individual arbitration requirement is successfully challenged. This clause is intended to benefit and bind certain third-party non-signatories and will remain in effect even after the agreement expires or terminates.