What rules govern the arbitration proceedings for Clean Your Dirty Face franchise disputes?
Clean_Your_Dirty_Face Franchise · 2025 FDDAnswer from 2025 FDD Document
Section are intended to benefit and bind certain third-party non-signatories and will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Any provisions of this Agreement below that pertain to judicial proceedings shall be subject to the agreement to arbitrate contained in this Section.
17.F. GOVERNING LAW.
ALL MATTERS RELATING TO ARBITRATION WILL BE GOVERNED BY THE FEDERAL ARBITRATION ACT (9 U.S.C. §§ 1 ET SEQ.). EXCEPT TO THE EXTENT GOVERNED BY THE FEDERAL ARBITRATION ACT, THE UNITED STATES TRADEMARK ACT OF 1946 (LANHAM ACT, 15 U.S.C. SECTIONS 1051 ET SEQ.), OR OTHER FEDERAL LAW, THIS AGREEMENT, AND ANY OTHER AGREEMENT BETWEEN YOU (OR ANY OF YOUR OWNERS OR AFFILIATES) AND US (OR ANY OF OUR AFFILIATES), AND ALL CLAIMS ARISING FROM THE RELATIONSHIP BETWEEN US (OR ANY OF OUR AFFILIATES), AND YOU (OR ANY OF YOUR OWNERS OR AFFILIATES) WILL BE GOVERNED BY THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO ITS CONFLICT OF LAWS RULES, EXCEPT THAT ANY STATE LAW REGULATING THE SALE OF FRANCHISES OR GOVERNING THE RELATIONSHIP OF A FRANCHISOR AND ITS FRANCHISES WILL NOT APPLY UNLESS ITS JURISDICTIONAL REQUIREMENTS ARE MET INDEPENDENTLY WITHOUT REFERENCE TO THIS SECTION.
17.G. CONSENT TO JURISDICTION.
SUBJECT TO SECTION 17.E ABOVE AND THE PROVISIONS BELOW, WE AND YOU (AND YOUR OWNERS) AGREE THAT ALL ACTIONS ARISING UNDER THIS AGREEMENT OR OTHERWISE AS A RESULT OF THE RELATIONSHIP BETWEEN YOU AND US MUST BE COMMENCED IN THE STATE OR FEDERAL COURT CLOSEST TO OUR THEN-CURRENT PRINCIPAL PLACE OF BUSINESS (CURRENTLY, HIGH POINT, NORTH CAROLINA), AND WE AND YOU (AND EACH OWNER) IRREVOCABLY
CONSENT TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS AND WAIVE ANY OBJECTION TO EITHER THE JURISDICTION OF OR VENUE IN THOSE COURTS. NONETHELESS, WE AND YOU (AND YOUR OWNERS) AGREE THAT ANY OF US MAY ENFORCE ANY ARBITRATION ORDERS AND AWARDS IN THE COURTS OF THE STATE OR STATES IN WHICH YOU ARE DOMICILED OR YOUR BUSINESS IS LOCATED.
17.H. WAIVER OF PUNITIVE DAMAGES AND JURY TRIAL.
EXCEPT FOR YOUR OBLIGATION TO INDEMNIFY US FOR THIRD PARTY CLAIMS UNDER SECTION 16.D, AND EXCEPT FOR PUNITIVE DAMAGES AVAILABLE TO EITHER PARTY UNDER FEDERAL LAW, WE AND YOU (AND YOUR OWNERS) WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, EXEMPLARY, OR MULTIPLE DAMAGES AGAINST THE OTHER AND AGREE THAT, IN THE EVENT OF A DISPUTE BETWEEN US AND YOU, THE PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS.
WE AND YOU IRREVOCABLY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM, WHETHER AT LAW OR IN EQUITY, BROUGHT BY EITHER OF US.
17.I. BINDING EFFECT.
This Agreement is binding on us and you and our and your respective executors, administrators, heirs, beneficiaries, permitted assigns, and successors in interest. Subject to our right to modify the Operations Manual and System Standards, this Agreement may not be modified except by a written agreement signed by both our and your duly-authorized officers.
17.J. LIMITATIONS OF CLAIMS AND CLASS ACTION BAR.
EXCEPT FOR CLAIMS ARISING FROM YOUR NONPAYMENT OR UNDERPAYMENT OF AMOUNTS YOU OWE US, ANY AND ALL CONTROVERSIES, DISPUTES, AND CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR OUR RELATIONSHIP WITH YOU WILL BE BARRED UNLESS A JUDICIAL OR ARBITRATION PROCEEDING IS COMMENCED WITHIN ONE (1) YEAR FROM THE DATE ON WHICH THE PARTY ASSERTING THE CLAIM KNEW OR SHOULD HAVE KNOWN OF THE FACTS GIVING RISE TO THE CLAIMS. HOWEVER, THE PARTIES AGREE THAT, IN ORDER TO COMPLY WITH THIS PROVISION, EITHER PARTY MAY COMMENCE A JUDICIAL OR ARBITRATION PROCEEDING BEFORE A RELATED MEDIATION PROCEEDING IS DECLARED COMPLETED.
ANY PROCEEDING WILL BE CONDUCTED ON AN INDIVIDUAL BASIS AND A PROCEEDING BETWEEN US AND OUR AFFILIATES, OR OUR AND THEIR RESPECTIVE SHAREHOLDERS, OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES, ON THE ONE HAND, AND YOU (OR YOUR OWNERS, GUARANTORS, AFFILIATES, AND EMPLOYEES) MAY NOT BE: (I) CONDUCTED ON A CLASS-WIDE BASIS, (II) COMMENCED, CONDUCTED OR CONSOLIDATED WITH ANY OTHER PROCEEDING,
(III) OR BROUGHT ON YOUR BEHALF BY ANY ASSOCIATION OR AGENT, NOR MAY ANY CLAIMS OF ANOTHER PARTY OR PARTIES BE JOINED WITH ANY CLAIMS ASSERTED IN ANY ACTION OR PROCEEDING BETWEEN YOU AND US. NO PREVIOUS COURSE OF DEALING SHALL BE ADMISSIBLE TO EXPLAIN, MODIFY, OR CONTRADICT THE TERMS OF THIS AGREEMENT. NO IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING SHALL BE USED TO ALTER THE EXPRESS TERMS OF THIS AGREEMENT
17.K. CONSTRUCTION.
The preambles and exhibits are a part of this Agreement which, together with the System Standards contained in the Operations Manual (which may be periodically modified, as provided in this Agreement) and the related documents, constitutes our and your entire agreement, and there are no other oral or written understandings or agreements between us and you, or oral or written representations by us, relating to the subject matter of this Agreement. Any understandings or agreements reached, or any representations made, before this Agreement are superseded by this Agreement. Nothing in this or in any related agreement, however, is intended to disclaim the representations we made in the franchise disclosure document that we furnished to you.
Any policies that we adopt and implement from time to time to guide us in our decision-making are subject to change, are not a part of this Agreement, and are not binding on us.
Except as expressly provided in this Agreement, nothing in this Agreement is intended or deemed to confer any rights or remedies on any person or legal entity not a party to this Agreement.
Source: Item 22 — CONTRACTS (FDD page 54)
What This Means (2025 FDD)
According to the 2025 Clean Your Dirty Face Franchise Disclosure Document, any disputes must be submitted for binding arbitration to the American Arbitration Association if either party demands it. The proceedings will be conducted by a single arbitrator, following the American Arbitration Association's Commercial Arbitration Rules, except where the franchise agreement specifies otherwise. The location for these proceedings will be selected by the arbitrator and must be within 50 miles of Clean Your Dirty Face's principal business location, which is currently High Point, North Carolina. The Federal Arbitration Act governs all arbitration-related matters. The arbitrator's award can be entered in any court with competent jurisdiction.
The arbitrator has broad authority to award relief, including money damages with interest, 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, as both parties waive any right to claim such damages to the fullest extent permitted by law. Both Clean Your Dirty Face and the franchisee must adhere to any applicable contractual or statutory limitations. In any arbitration, each party must submit any claim that would constitute a compulsory counterclaim as defined by Rule 13 of the Federal Rules of Civil Procedure; failure to do so will bar the claim. The arbitrator is prohibited from considering any settlement discussions or offers made by either party.
Arbitration will be conducted on an individual basis, meaning no class-wide actions, consolidated proceedings, or actions brought on behalf of the franchisee by an association or agency are permitted. If any part of this restriction is deemed unenforceable, the arbitration clause will not apply, and the dispute will be resolved in a judicial proceeding. Despite the agreement to arbitrate, both parties retain the right to seek temporary restraining orders and preliminary injunctive relief from a court, provided they simultaneously submit the dispute for arbitration on the merits. Document requests are limited to those directly relevant to significant issues, restricted by time frame, subject matter, and the parties involved, and must avoid broad language. Interrogatories and requests to admit are not allowed. These arbitration provisions benefit and bind third-party non-signatories and remain effective even after the agreement expires or terminates.