What amount in damages did Baby Buford, LLC seek from Checkersrallys in their Demand for Arbitration?
Checkersrallys 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
Source: Item 3 — LITIGATION (FDD pages 15–17)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Baby Buford, LLC, along with several related entities, filed a Demand for Arbitration against Checkersrallys on March 30, 2020, seeking $299,999 in damages. The claim alleged wrongful termination of their franchise agreements in violation of the Michigan Franchise Investment Law, as well as misappropriation and commingling of advertising contributions made by Baby Buford. Checkersrallys denies any wrongdoing related to these claims.
This type of legal dispute is not uncommon in franchising, where disagreements over contract terms, termination, and financial obligations can arise between the franchisor and franchisees. The fact that Baby Buford sought a significant amount in damages highlights the potential financial risks involved in such disputes. For a prospective Checkersrallys franchisee, this litigation serves as a reminder to carefully review the franchise agreement and understand the obligations and potential liabilities associated with the franchise.
It's important to note that Checkersrallys responded to the Demand for Arbitration by filing a Petition to Compel Arbitration in Federal Court, arguing that each franchise entity should have a separate arbitration. The Court agreed with Checkersrallys, staying the current arbitration and requiring separate arbitrations if Baby Buford wished to proceed. As of the FDD's publication, the claimants had not taken further action since the Court's order in January 6, 2021, and do not appear to be actively pursuing their claims, although the arbitration action has not been withdrawn. This outcome suggests that Checkersrallys took a proactive approach to managing the dispute and enforcing the terms of the franchise agreement.