In Checkersrallys arbitration, what happens to claims that would constitute a compulsory counterclaim but are not submitted?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
The parties agree that, in connection with any such arbitration proceeding, each shall submit or file any claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedures) within the same proceeding as the claim to which it relates.
Any such claim which is not submitted or filed in such proceeding shall be waived and such party will forever be barred from asserting such a claim.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, if a party fails to submit a claim that would be considered a compulsory counterclaim, as defined by Rule 13 of the Federal Rules of Civil Procedure, during an arbitration proceeding, that claim is waived. This means the party forfeits the right to assert that claim in the future. This requirement applies to both Checkersrallys as the franchisor and the franchisee.
This provision is significant for prospective franchisees because it emphasizes the importance of presenting all related claims at the time of arbitration. Failing to do so could permanently bar a franchisee from pursuing those claims later. This encourages thorough preparation and comprehensive legal strategy during any arbitration proceedings with Checkersrallys.
For franchisees, this means they must carefully assess all potential counterclaims they might have against Checkersrallys when facing arbitration. They should consult with legal counsel to ensure all relevant claims are identified and properly presented during the arbitration. This clause aims to streamline dispute resolution by preventing piecemeal litigation and ensuring all related issues are addressed in a single proceeding.