Does the Checkersrallys arbitration agreement allow for multi-plaintiff, consolidated, or class-wide proceedings?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties further agree that the arbitration proceedings shall be commenced and conducted on an individual basis only and not on a multi-plaintiff, consolidated or class-wide basis, that the arbitrators have no authority to conduct any such multi-plaintiff, consolidated, or class-wide proceedings under this Section 18.05, and that each side expressly waives any ability or right to initiate or assert any such multi-plaintiff, consolidated, or class-wide claims in connection with any arbitration proceeding.
The foregoing sentence is an integral provision of the arbitration procedures set forth in this paragraph, and may not be severed therefrom, notwithstanding Section 18.01 of this Agreement.
If such sentence is determined to be invalid or unenforceable under applicable law in connection with a particular controversy, dispute, or claim, then the entire first paragraph of Section 18.05 shall be stricken from this Agreement and neither party shall be deemed to have consented to arbitration of such controversy, dispute, or claim.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the arbitration proceedings are to be conducted on an individual basis only. The agreement explicitly prohibits multi-plaintiff, consolidated, or class-wide proceedings. The arbitrators do not have the authority to conduct such proceedings, and franchisees expressly waive any right to initiate or assert these types of claims in connection with any arbitration. This waiver is a critical part of the arbitration procedures and cannot be removed from the agreement.
This means that a Checkersrallys franchisee cannot join with other franchisees to bring a single arbitration case against the franchisor. Each franchisee must pursue their claims individually. This can increase the cost and complexity for franchisees seeking to resolve disputes with Checkersrallys, as they cannot pool resources or share legal costs with other franchisees.
However, the FDD also states that if the prohibition against multi-plaintiff, consolidated, or class-wide proceedings is found to be invalid or unenforceable under applicable law, then the entire arbitration agreement is void, and neither party is bound to arbitrate the dispute. This clause ensures that if the waiver is deemed illegal, the franchisee retains the right to pursue their claims in court.