What amount in damages did Baby Buford initially seek from Checkers in their demand for arbitration?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
or the Southern District of Florida
Baby Buford, LLC, Baby Buford HP, LLC, Baby Buford Warren, LLC, Baby Buford 8 Mile, LLC, Baby Buford Southfield, LLC, Baby Buford 23 Mile Road, LLC, Baby Buford Livernois, LLC, Baby Buford Woodward, LLC, Baby Buford 14 Mile, LLC, Baby Buford Port Huron, LLC, Baby Buford Ypsilanti, LLC, Baby Buford Sylvan Lake, LLC, and Baby Buford Harper, LLC (collectively hereafter referred to as "Baby Buford") are former Checkers franchisees. On December 19, 2019, we terminated the franchise agreements based on failure
to pay required advertising contributions. On March 30, 2020, Baby Buford filed a single Demand for Arbitration against us seeking $299,999 in damages and alleging that (i) their franchise agreements had been wrongfully terminated in violation of the Michigan Franchise Investment Law, and (ii) we misappropriated and comingled advertising contributions made by Baby Buford. We deny any wrongdoing in this matter and all claims made by Baby Buford. On April 27, 2020, we filed a Petition to Compel Arbitration in Federal Court in which we asserted that the franchise agreements require a separate arbitration for each franchise entity. The Court agreed and, on January 6, 2021, the Court entered an Order staying the current arbitration and requiring separate arbitrations should Baby Buford wish to proceed. The claimants have taken no further action since the Court's January 6, 2021 order and do not appear to be actively pursuing their claims, although the arbitration action has not been withdrawn at this time.
Source: Item 3 — LITIGATION (FDD pages 15–17)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Baby Buford, LLC, along with several related entities, filed a Demand for Arbitration against Checkers on March 30, 2020. In this demand, Baby Buford sought $299,999 in damages. The basis for their claim was the allegation that Checkers had wrongfully terminated their franchise agreements in violation of the Michigan Franchise Investment Law. Additionally, Baby Buford claimed that Checkers misappropriated and comingled advertising contributions made by them.
Checkers denied any wrongdoing related to Baby Buford's claims. In response to the Demand for Arbitration, Checkers filed a Petition to Compel Arbitration in Federal Court on April 27, 2020. Checkers argued that the franchise agreements required a separate arbitration for each franchise entity owned by Baby Buford. The Court agreed with Checkers and, on January 6, 2021, issued an order staying the current arbitration. The order stipulated that separate arbitrations would be required if Baby Buford wished to proceed with their claims.
As of the FDD's publication, Baby Buford had not taken any further action since the Court's January 6, 2021 order. While it appears they are not actively pursuing their claims, the arbitration action has not been formally withdrawn. This ongoing legal dispute highlights the potential for conflicts and the importance of understanding the terms of the franchise agreement, particularly regarding termination clauses and advertising contributions.