Can settlement discussions or offers be considered by the arbitrator in a Cinnaholic arbitration proceeding?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
THE ARBITRATOR MAY NOT CONSIDER ANY SETTLEMENT DISCUSSIONS OR OFFERS THAT MIGHT HAVE BEEN MADE BY EITHER PARTY.
FRANCHISOR RESERVES THE RIGHT, BUT HAS NO OBLIGATION, TO ADVANCE DEVELOPER'S SHARE OF THE COSTS OF ANY ARBITRATION PROCEEDING IN ORDER FOR SUCH ARBITRATION PROCEEDINGS TO TAKE PLACE AND BY DOING SO WILL NOT BE DEEMED TO HAVE WAIVED OR RELINQUISHED FRANCHISOR'S RIGHT TO SEEK THE RECOVERY OF THOSE COSTS IN ACCORDANCE WITH SECTION 22.
THE ARBITRATION WILL BE CONDUCTED ON AN INDIVIDUAL, NOT A CLASS-WIDE BASIS, AND THE ARBITRATION PROCEEDING MAY NOT BE CONSOLIDATED WITH ANY OTHER ARBITRATION PROCEEDING BETWEEN FRANCHISOR AND ANY OTHER PERSON.
Source: Item 23 — RECEIPT (FDD pages 62–269)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, the arbitrator in any arbitration proceeding between the franchisor and the developer (franchisee) is explicitly prohibited from considering any settlement discussions or offers made by either party. This means that any attempts to resolve the dispute through negotiation or compromise prior to the arbitration hearing will not be taken into account during the arbitration process itself.
This clause ensures that the arbitrator's decision is based solely on the merits of the case as presented during the arbitration hearing, without being influenced by prior settlement negotiations. It encourages both parties to present their strongest arguments and evidence during the arbitration, as previous offers or discussions are irrelevant.
For a prospective Cinnaholic franchisee, this means that it is crucial to prepare thoroughly for arbitration and present a compelling case, as the arbitrator will not consider any prior settlement attempts. This provision could potentially prolong the dispute resolution process, as parties may be less incentivized to compromise beforehand, knowing that such discussions will not be considered by the arbitrator. However, it also ensures a more objective and unbiased decision based solely on the facts presented during the arbitration hearing.
It is also important to note that Cinnaholic reserves the right to advance the franchisee's share of the arbitration costs without waiving its right to seek recovery of those costs later. The arbitration will be conducted on an individual basis and cannot be consolidated with other arbitration proceedings.