How are disputes between a Christian Brothers Automotive tenant, lessor, and owner resolved?
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, disputes among the parties, including the tenant, lessor, and owner, are resolved through binding arbitration. If direct discussions fail to settle a dispute, the parties agree to resolve it through binding arbitration administered by the American Arbitration Association, following its Commercial Arbitration Rules. A court can enter judgment upon the arbitrator's award if it has jurisdiction. Unless the parties agree to a different number in writing, arbitrations are conducted before three arbitrators, but never an even number.
This arbitration clause covers a broad range of disputes, including those arising from the Lease, the Franchise Agreement, or any other agreement or relationship between the parties. It extends to claims for breach, termination, or invalidity of these agreements, as well as claims for tortious interference or other statutory claims. The clause also encompasses disputes involving employees, officers, directors, supervisors, or members of management of either party.
Furthermore, the document states that any court with jurisdiction can order the consolidation of arbitrable disputes under the Lease or Franchise Agreement with related disputes not arising under those agreements, if deemed necessary for justice or efficiency. This consolidation ensures that all related issues can be resolved in a single arbitration proceeding, streamlining the dispute resolution process. The Franchise Agreement involves interstate commerce, so the Federal Arbitration Act applies to any arbitration.
For a prospective Christian Brothers Automotive franchisee, this means that any disputes with the franchisor, landlord, or other related parties will likely be resolved through arbitration rather than in court. While arbitration can be a faster and more cost-effective method of dispute resolution, it also means giving up the right to a jury trial. Franchisees should carefully consider the implications of this arbitration clause and consult with an attorney to understand their rights and obligations.