Can arbitration for Cilantro Taco Grill be conducted on a class-wide basis?

According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, any arbitration will be conducted on an individual basis, explicitly excluding class-wide or multiple plaintiffs. This means that franchisees are not permitted to consolidate their claims into a single class action against Cilantro Taco Grill.

This clause has significant implications for prospective franchisees. It means that each franchisee must pursue their disputes independently, bearing the full cost and effort of arbitration. This can be a disadvantage if many franchisees have similar grievances, as a class-wide arbitration could be a more efficient and cost-effective way to address them collectively. However, the individual approach ensures that each franchisee's specific circumstances and damages can be considered separately.

The FDD also specifies that the arbitration will be managed by the American Arbitration Association following its Commercial Arbitration Rules, with the location being Cook County, Illinois, or the franchisee's principal place of business, as elected by Cilantro Taco Grill. The arbitrator must have at least five years of experience in franchising or distribution law. The arbitration agreement is self-executing and remains in effect even after the franchise agreement expires or terminates. Punitive or exemplary damages are waived in any arbitration proceeding.