Does the non-disparagement clause in the Christian Brothers Automotive agreement apply to the Franchisor's officers?
Christian_Brothers_Automotive Franchise · 2025 FDDAnswer from 2025 FDD Document
(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)
Based on the 2025 Christian Brothers Automotive Franchise Disclosure Document, the dispute resolution agreement includes disputes involving officers of either party. Specifically, the agreement applies to disputes that involve "any employee, officer, director, supervisor or member of management of either party".
This means that if a franchisee has a dispute with an officer of Christian Brothers Automotive, or vice versa, the dispute is subject to binding arbitration as outlined in the agreement. This includes claims arising from the agreement itself, or from tortious or statutory claims that occur before, during, or after the termination of the agreement.
The agreement emphasizes that disputes will be resolved through binding arbitration administered by the American Arbitration Association, following its Commercial Arbitration Rules. This process is intended to provide a structured and legally binding method for resolving conflicts outside of traditional court litigation. The arbitration will be conducted before three arbitrators, unless both parties agree to a different number in writing, ensuring a balanced approach to the resolution process.
For a prospective franchisee, this clause means that any grievances or disputes involving Christian Brothers Automotive officers will be handled through arbitration, potentially offering a quicker and more cost-effective resolution compared to court proceedings. However, it also means relinquishing the right to sue in court, so franchisees should carefully consider the implications and consult with legal counsel to fully understand their rights and obligations under this agreement.