Can the arbitrator award specific performance of the Cilantro Taco Grill agreement?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
20.3.1 Except disputes not subject to alternative dispute resolution as set forth in Section 20.4, any dispute between Franchisor and Franchisee and/or any Principal arising out of or relating to this Agreement, the Exhibits hereto or any breach thereof, including any claim that this Agreement or any of its parts, is invalid, illegal or otherwise voidable or void, which has not been resolved in accordance with Sections 20.1 or 20.2, will be resolved by submission to the American Arbitration Association or its successor organization to be settled by a single arbitrator in accordance with the Commercial Arbitration Rules then in effect for such Association or successor organization. The arbitrator will have a minimum of five (5) years of experience in franchising or distribution law and will have the right to award specific performance of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to Cilantro Taco Grill's 2024 Franchise Disclosure Document, the arbitrator has the right to award specific performance of the agreement. This means that if a dispute arises and goes to arbitration, the arbitrator can order either the franchisor or the franchisee to fulfill their obligations under the franchise agreement, rather than just awarding monetary damages.
For a prospective Cilantro Taco Grill franchisee, this is a significant point. Specific performance could be ordered if, for example, the franchisee fails to adhere to the operational standards outlined in the franchise agreement, or if Cilantro Taco Grill fails to provide the agreed-upon support and training. This remedy ensures that the terms of the agreement are actually carried out, which can be crucial for maintaining brand consistency and operational effectiveness within the Cilantro Taco Grill system.
The FDD specifies that the arbitrator must have a minimum of five years of experience in franchising or distribution law, suggesting that Cilantro Taco Grill intends for disputes to be resolved by someone with relevant expertise. The arbitration will be conducted according to the Commercial Arbitration Rules of the American Arbitration Association or its successor, providing a structured process for dispute resolution. All hearings will take place in Cook County, Illinois, or at the American Arbitration Association offices, unless Cilantro Taco Grill elects to hold them in the county where the franchisee's principal place of business is located.