Who can demand arbitration in a dispute related to the Clean Your Dirty Face franchise agreement?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
must be submitted for binding arbitration, on demand of either party, to the American Arbitration Association. The arbitration proceedings will be conducted by one arbitrator and, except as this Section otherwise provides, according to the then-current Commercial Arbitration Rules of the American Arbitration Association. All proceedings will be conducted at a suitable location chosen by the arbitrator in or within 50 miles of our (or our successor's or assign's, as applicable) then-current principal place of business (currently, High Point, North Carolina). All matters relating to arbitration will be governed by the Federal Arbitration Act (9 U.S.C. §§ 1 et seq.). Judgment upon the arbitrator's award may be entered in any court of competent jurisdiction.
The arbitrator has the right to award or include in his or her award any relief which he or she deems proper, including, without limitation, money damages (with interest on unpaid amounts from the date due), specific performance, injunctive relief, and attorneys' fees and costs, provided that the arbitrator may not declare any of the trademarks owned by us or our affiliates generic or invalid or, except as expressly provided in this Section 17, award any punitive, exemplary, or multiple damages against any party to the arbitration proceeding (we and you hereby waiving to the fullest extent permitted by law any such right to or claim for any punitive, exemplary, or multiple damages against any party to the arbitration proceedings).
We and you agree to be bound by the provisions of any applicable contractual or statutory limitations provision, whichever expires earlier. We and you further agree that, in any arbitration proceeding, each party must submit or file any controversy, dispute, or claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) within the same proceeding. Any controversy, dispute, or claim which is not submitted or filed as required will be forever barred. The arbitrator may not consider any settlement discussions or offers that might have been made by either you or us.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Clean Your Dirty Face Franchise Disclosure Document, either the franchisor or the franchisee can demand that disputes be submitted for binding arbitration. This process involves submitting the dispute to the American Arbitration Association, following their Commercial Arbitration Rules. A single arbitrator will conduct the proceedings at a location within 50 miles of Clean Your Dirty Face's principal business location in High Point, North Carolina. The Federal Arbitration Act governs all arbitration-related matters.
This means that if a disagreement arises between Clean Your Dirty Face and a franchisee regarding the franchise agreement, either party can initiate arbitration instead of pursuing a lawsuit in court. The arbitrator's decision is binding, and a judgment can be entered in any court with jurisdiction. The arbitrator has the authority to award various forms of relief, including monetary damages, specific performance, injunctive relief, and attorneys' fees and costs. However, the arbitrator cannot invalidate Clean Your Dirty Face's trademarks or award punitive, exemplary, or multiple damages.
Both Clean Your Dirty Face and the franchisee must adhere to any applicable contractual or statutory limitations. Furthermore, any claim that would be considered a compulsory counterclaim under the Federal Rules of Civil Procedure must be submitted within the same arbitration proceeding, or it will be permanently barred. The arbitrator is prohibited from considering any settlement discussions or offers made by either party. This ensures a focus on the merits of the case rather than previous negotiation attempts.
It is important for prospective Clean Your Dirty Face franchisees to understand that by agreeing to the franchise agreement, they are also agreeing to resolve potential disputes through arbitration, which has specific rules and limitations. This can be a more efficient and cost-effective method of dispute resolution compared to traditional litigation, but it also means giving up the right to a jury trial. Franchisees should carefully consider these implications before signing the agreement.