Is the arbitration for Christian Brothers Automotive binding?
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.
Franchise Agreement (Ver 04-14-2025)
Franchisee: ___________
Franchisor: Christian Brothers Automotive Corporation
(b) The parties expressly agree that any court with jurisdiction may order the
consolidation of any arbitrable dispute, controversy or claim under this Agreement
with any related arbitrable dispute, controversy or claim not arising under this
Agreement, as the court may deem necessary in the interests of justice or efficiency
or on such other grounds as the court may deem appropriate, provided that the
consolidated disputes, controversies and claims are to be resolved in arbitration.
(c) The site of the arbitration shall be in Houston, Texas, and shall take place in the
offices of the American Arbitration Association or such other place as the parties
may agree.
Source: Item 23 — RECEIPTS (FDD pages 76–372)
What This Means (2025 FDD)
According to Christian Brothers Automotive's 2025 Franchise Disclosure Document, disputes that cannot be resolved through direct discussions will be settled through binding arbitration. This arbitration is administered by the American Arbitration Association (AAA) and follows its Commercial Arbitration Rules. The judgment made by the arbitrator(s) can be entered in any court that has jurisdiction. The Federal Arbitration Act applies to any arbitration because the agreement involves interstate commerce. Unless agreed upon in writing, any arbitration will be conducted before three arbitrators, and under no circumstances will an even number of arbitrators be used.
This means that if a Christian Brothers Automotive franchisee has a dispute with the franchisor that cannot be resolved informally, they are required to go through arbitration, and the arbitrator's decision is legally binding. This eliminates the franchisee's right to sue Christian Brothers Automotive in court. The arbitration process will be managed by the AAA, ensuring a structured and impartial approach to resolving the dispute. The arbitration will take place with either three arbitrators or another number agreed upon in writing.
Furthermore, any court with jurisdiction can order the consolidation of arbitrable disputes under the Franchise Agreement with related disputes not arising under the agreement, if deemed necessary for justice or efficiency. The arbitrator(s) will determine the rights and obligations of the parties according to applicable federal laws and the substantive laws of the State of Texas, excluding conflicts of laws principles. The arbitrator(s) must also consider defenses related to the timeliness of the claim based on laches or statute of limitations as a preliminary issue before considering the substantive merits of the arbitration claim.
Christian Brothers Automotive includes these stipulations to ensure disputes are resolved efficiently and consistently. Franchisees should be aware of the implications of binding arbitration, including the waiver of the right to a jury trial and the potential costs associated with the arbitration process. Franchisees should consult with legal counsel to fully understand the dispute resolution process and its impact on their rights.