Does City Wide intend for arbitrations with franchisees to be conducted on a class-wide basis?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
- 27.4 It is the intent of the parties that any arbitration between Franchisee and CITY WIDE will be of Franchisee's individual claim and that the claim subject to arbitration will not be arbitrated on a class wide basis.
- 27.6 The Franchisee agrees that arbitration shall be conducted solely on an individual basis, and not in a class, collective, consolidated, or representative action. Franchisee shall not have the right or authority to: (a) arbitrate any claim as a class action, representative action or mass arbitration, (b) join or consolidate claims in arbitration with other franchisees or third parties; or (c) participate in any collective or coordinated proceeding in arbitration or in court. The arbiter shall have no authority to hear or decide any such prohibited claims.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide does not intend for arbitrations with franchisees to be conducted on a class-wide basis. The franchise agreement specifies that any arbitration between a franchisee and City Wide will address the franchisee's individual claim and will not be arbitrated on a class-wide basis.
This means that franchisees are prohibited from initiating or participating in class actions, representative actions, or mass arbitrations against City Wide. Franchisees also cannot consolidate their claims with other franchisees or third parties in arbitration. The arbitrator is not authorized to hear or decide any claims that violate these restrictions.
This clause is intended to ensure that disputes are handled on an individual basis, which can limit City Wide's exposure to large-scale legal actions. However, it may also increase costs for franchisees who have similar grievances, as they cannot pool resources or share legal expenses in a class action. Prospective franchisees should be aware of this limitation and consider its potential impact on their ability to resolve disputes with City Wide.