Where does the binding arbitration required by the Cinch I.T. Franchise Agreement take place?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
cted before a single Arbitrator, selected in accordance with AAA Rules, who has been actively engaged in the practice of law for at least ten (10) years and has franchise law experience. Prior to the commencement of hearings, the Arbitrator shall provide an oath of undertaking of impartiality.
- (c) Arbitration shall be conducted in the city and state where We maintain Our principal place of business (or, if there is no AAA office in that city, at the location of the AAA office nearest to Our principal place of business, which is currently Worcester, Massachusetts).
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, arbitration proceedings will be conducted in the city and state where Cinch I.T. maintains its principal place of business. If there is no American Arbitration Association (AAA) office in that city, the arbitration will occur at the location of the AAA office nearest to Cinch I.T.'s principal place of business, which is currently Worcester, Massachusetts.
This means that a Cinch I.T. franchisee could be required to travel to Worcester, Massachusetts, for arbitration hearings, regardless of where their franchise is located. This could result in significant travel expenses and inconvenience for the franchisee. The arbitrator will be selected according to AAA rules, must have practiced law for at least ten years, and must have franchise law experience.
Furthermore, the FDD states that any party may bring an action to compel arbitration in a court of competent jurisdiction in the state and judicial district where Cinch I.T. maintains its principal place of business. They may also seek provisional remedies, including temporary or injunctive relief, in connection with a dispute, without needing to provide a bond or security, as long as the dispute is ultimately resolved through binding arbitration.
For prospective franchisees, it's important to understand that while the franchise agreement mandates arbitration, the specific location could add considerable cost and logistical challenges if a dispute arises. Franchisees should also be aware of their right to seek legal remedies to compel arbitration or obtain preliminary relief during a dispute.