Does the agreement specify which version of the American Arbitration Association's Commercial Arbitration Rules applies to Christian Brothers Automotive disputes?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
ver.
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
24. DISPUTE RESOLUTION AGREEMENT.
24.01 Dispute Resolution Agreement.
(a) If a dispute, controversy or claim arises between or among any or all of the parties, including without limitation any dispute, controversy or claim that arises out of or relates to this Agreement or any other agreement, instrument, or relationship between the parties, or the breach, termination or invalidity of the Agreement or any such other agreement or instrument, AND including but not limited to a claim based on or arising out of a claim for tortious interference or other tortious or statutory claims arising before, during or after termination of this Agreement and including any dispute that involves any or all of the parties and any employee, officer, director, supervisor or member of management of either party hereto (collectively the "Dispute"), and if the Dispute cannot be settled through direct discussions, the parties agree to resolve the Dispute by binding arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules (the "Rules"), and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. Any arbitration hereunder shall be pursuant to the applicable rules of the American Arbitration Association as set out above except to the extent modified in this Section. The parties acknowledge that this Agreement and/or the dealings of the parties involve interstate commerce and that the Federal Arbitration Act applies to any arbitration hereunder. Any such arbitration shall be conducted before three (3) arbitrators unless the parties agree in writing to a different number. No arbitration shall be conducted before an even number of arbitrators.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to the 2025 Christian Brothers Automotive Franchise Disclosure Document, any disputes that cannot be resolved through direct discussion will be settled through binding arbitration. This arbitration will be administered by the American Arbitration Association (AAA) and will follow its Commercial Arbitration Rules. The document specifies that the rules applied will be those in effect at the time of the arbitration, but also notes that these rules can be modified within the agreement itself.
This means that a Christian Brothers Automotive franchisee will have to resolve disputes through arbitration rather than litigation in court. The arbitration process will be governed by the AAA's Commercial Arbitration Rules, but the specifics of how those rules are applied can be adjusted as detailed in the franchise agreement.
It is important for a prospective franchisee to understand the implications of agreeing to arbitration, including the cost, location, and selection of arbitrators. The Christian Brothers Automotive agreement specifies that any arbitration will be conducted before three arbitrators, unless both parties agree to a different number in writing, but never an even number of arbitrators. The franchisee should also be aware that the arbitrator's decision is final and binding, with limited options for appeal.
Christian Brothers Automotive also states that the arbitrator(s) will determine the rights and obligations of the parties according to applicable federal laws and the substantive laws of Texas, excluding any conflict of laws principles. A party against whom a final award is entered by the arbitrator(s) agrees to pay the prevailing party all reasonable costs, charges, and expenses, including arbitration filing fees, arbitrator fees, and reasonable attorney and expert fees.