Under what rule are settlement discussions protected during a Checkersrallys arbitration?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
Settlement discussions occurring between the parties in relation to any dispute falling within the scope of this Section 18.05 shall be protected by Federal Rule of Evidence 408 and all other applicable rules limiting and/or precluding disclosure.
The parties further agree that unless otherwise agreed in writing, neither side shall be permitted to disclose any settlement discussions to the arbitrators for any reason and that the arbitrators may not consider any settlement discussions or offers that might have been made by either you or us prior to commencing the arbitration proceeding.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, settlement discussions during arbitration are protected by Federal Rule of Evidence 408. This rule, along with other applicable rules, limits and/or precludes the disclosure of settlement discussions. This means that any offers or discussions made between Checkersrallys and the franchisee during settlement negotiations cannot be used as evidence or disclosed to the arbitrators.
Furthermore, unless both parties agree in writing, neither Checkersrallys nor the franchisee can disclose any settlement discussions to the arbitrators for any reason. The arbitrators, in turn, are prohibited from considering any settlement discussions or offers made before the arbitration proceeding commenced. This provision aims to encourage open and honest settlement negotiations without fear that these discussions will prejudice either party during arbitration.
This protection of settlement discussions is a fairly standard practice in franchise agreements, as it promotes a more collaborative approach to dispute resolution. By ensuring confidentiality, both Checkersrallys and the franchisee can explore potential resolutions without the risk of weakening their position in the event that arbitration becomes necessary. This can save time and money by facilitating quicker settlements and reducing the need for protracted legal battles.