Does the City Wide franchise agreement allow for class-wide arbitration?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
SECTION 27. Arbitration and Dispute Resolution
- 27.1 All controversies, disputes or claims arising between Franchisee and CITY WIDE in connection with, arising from, or with respect to: (1) any provision of this Agreement or in any other agreement related to this Agreement between the parties; (2) the relationship of the parties; (3) the validity of this Agreement or any other agreement related to this Agreement between the parties, or any provisions of those agreements; or (4) any specification, standard or operating procedure relating to the establishment or operation of the Franchised Business (except controversies, disputes or claims relating to the Marks or any lease or sublease or real estate) which is not resolved within fifteen (15) calendar days after either party notifies the other in writing of such controversy, dispute or claim, will be submitted for binding arbitration in accordance with the Commercial Rules ("Rules") of the American Arbitration Association or its successor. Arbitration will take place at an appointed time and place in Lenexa, Kansas, or such other location designated by CITY WIDE in the Kansas City, Missouri Metropolitan area.
- 27.2 The parties shall select an arbitrator pursuant to the Rules, or its successors, within the time required by such Rules, following the initial arbitration request or application, and such arbitration shall be governed by such Rules. Judgment upon any award of the arbitrator will be binding and will be entered in a court of competent jurisdiction. The award of the arbitrator may grant any relief which might be granted
by a court of general jurisdiction, including, without limitation, by reason of enumeration, award of damages and/or injunctive relief, and may, in the discretion of the arbitrator, assess, in addition, the costs of the arbitration, including the reasonable fees of the arbitrator and reasonable attorneys' fees, against either or both parties, in such proportions as the arbitrator will determine.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
Based on the 2025 City Wide Franchise Disclosure Document, the franchise agreement does not explicitly address whether class-wide arbitration is permitted. Section 27.1 outlines that any controversies, disputes, or claims arising between the franchisee and City Wide related to the agreement, the relationship of the parties, the validity of the agreement, or any operating procedure will be submitted for binding arbitration. The arbitration will follow the Commercial Rules of the American Arbitration Association and take place in Lenexa, Kansas, or another location designated by City Wide in the Kansas City, Missouri Metropolitan area.
The agreement specifies that the arbitrator's award will be binding and can grant any relief that a court of general jurisdiction could, including damages and injunctive relief. The arbitrator also has the discretion to assess the costs of arbitration, including reasonable fees for the arbitrator and attorneys, against either party. However, the document remains silent on whether these arbitration proceedings can be conducted on a class-wide basis, involving multiple franchisees with similar claims.
Given the absence of specific language regarding class-wide arbitration in the City Wide franchise agreement, prospective franchisees should seek clarification from City Wide regarding their policy on this matter. It is important to understand whether franchisees can participate in class-wide arbitration or are limited to individual arbitration proceedings. This information can significantly impact a franchisee's ability to address systemic issues or disputes affecting multiple franchisees simultaneously.