What is the effect of the arbitrator's decision in a Cinch I.T. arbitration?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
The decision of the arbitrator shall be final and binding.
You know, understand, and agree that it is the intent of the Parties that any arbitration between Franchisor and the Multi-Unit Developer shall be of the Multi-Unit Developer's individual claims and that the claims subject to arbitration shall not be arbitrated in conjunction with the claims of other Multi-Unit Developers or franchisees or on a class-wide basis, and You hereby waive any right You may assert to have Your claims arbitrated in conjunction with the claims of other Multi-Unit Developers or franchisees or on a class-wide basis.
The costs and expenses of Arbitration, including compensation and expenses of the Arbitrator, shall be borne by the non-prevailing party.
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to the 2024 Cinch I.T. Franchise Disclosure Document, the arbitrator's decision is final and binding on both parties. Once the arbitrator makes a decision, it can be enforced in any court with jurisdiction. This means that both Cinch I.T. and the franchisee must abide by the arbitrator's ruling, and the opportunity to appeal the decision is extremely limited. The costs and expenses of Arbitration, including compensation and expenses of the Arbitrator, shall be borne by the non-prevailing party.
Cinch I.T. may seek preliminary injunctive relief to protect its Marks or other rights. However, the final determination of the dispute will be decided by arbitration, and court recourse is limited to enforcing the arbitration award. The arbitrator cannot modify the terms of the franchise agreement, and is not allowed to award punitive or exemplary damages unless prohibited by law.
This clause is typical in franchise agreements, as arbitration is intended to be a faster and more cost-effective way to resolve disputes than litigation. However, franchisees should be aware that the arbitrator's decision is difficult to overturn, so it is important to present a strong case during the arbitration process. Franchisees also waive the right to participate in class-wide arbitrations against Cinch I.T.