Who bears the costs of arbitration in the Cinch I.T. Franchise Agreement?

According to the 2024 Cinch I.T. Franchise Disclosure Document, the costs and expenses of arbitration, including the compensation and expenses of the arbitrator, are borne by the non-prevailing party. This means that whichever party does not win the arbitration case is responsible for covering these costs.

This arrangement can significantly impact a franchisee's decision to pursue arbitration. If a Cinch I.T. franchisee has a dispute with the franchisor, they must carefully consider the strength of their case and the potential financial burden if they do not win. The costs of arbitration can be substantial, including the arbitrator's fees, legal representation, and other associated expenses. Therefore, a franchisee should conduct a thorough cost-benefit analysis before initiating arbitration.

It is also important to note that the arbitrator is not authorized to amend or modify the terms of the franchise agreement, and neither party is liable for punitive or exemplary damages, unless such a limitation is prohibited by law. The arbitration will take place at the American Arbitration Association offices in Worcester, Massachusetts, or the closest office to it. This location is predetermined, regardless of where the franchisee's business is located, which could add travel costs for the franchisee.