In Checkersrallys arbitration, can settlement discussions be disclosed to the arbitrators?

According to Checkersrallys's 2025 Franchise Disclosure Document, settlement discussions are generally confidential and cannot be disclosed to the arbitrators. The FDD specifies that unless both parties agree otherwise in writing, neither Checkersrallys nor the franchisee can disclose any settlement discussions to the arbitrators for any reason. Furthermore, the arbitrators themselves are prohibited from considering any settlement discussions or offers made before the arbitration proceeding began. This provision aims to encourage open and honest settlement negotiations without fear that these discussions will prejudice either party during arbitration.

This confidentiality is further reinforced by the statement that settlement discussions are protected by Federal Rule of Evidence 408 and other applicable rules that limit or preclude disclosure. This rule generally protects statements made during settlement negotiations from being used as evidence to prove liability or the amount of damages. By incorporating this protection, Checkersrallys aims to create a more conducive environment for resolving disputes outside of the formal arbitration process.

For a prospective Checkersrallys franchisee, this means that any attempts to settle a dispute with the franchisor prior to arbitration will remain confidential. This allows franchisees to explore settlement options without worrying that their offers or statements will be used against them if the dispute proceeds to arbitration. However, it is crucial to understand that this protection applies only to settlement discussions and not to other communications or information that may be relevant to the dispute.