What is the effect of the agreement to arbitrate on the Coffee News franchise agreement?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
- Arbitration.
Except for obtaining injunctive relief by either party against actual or threatened conduct that would cause irreparable harm to that party, all controversies, disputes or claims arising under this Agreement between Franchisor and Franchisee shall be submitted for arbitration to the Office of the American Arbitration Association nearest to Franchisor on demand of either Franchisor or Franchisee.
Such arbitration proceedings shall be conducted in Bangor, Maine.
Except as otherwise provided in this Agreement, such claims shall be heard by one arbitrator in accordance with the then Current Commercial Arbitration Rules of the American Arbitration The administrative cost of the arbitration, including the cost of the Association. arbitrator, shall be borne equally by the parties.
Each party shall be responsible for the payment of its own attorneys' fees and expenses.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, any disputes arising under the Franchise Agreement between Coffee News and the franchisee will be submitted for arbitration. This arbitration will occur through the American Arbitration Association office nearest to Coffee News. The location for these proceedings is Bangor, Maine.
There is an exception to this arbitration agreement: either Coffee News or the franchisee can seek injunctive relief from a court if they believe the other party's actions could cause irreparable harm. Injunctive relief is a court order that requires a party to do or cease doing a specific action.
The arbitration will be conducted by a single arbitrator, following the American Arbitration Association's current Commercial Arbitration Rules. Both Coffee News and the franchisee will equally share the administrative costs of the arbitration, including the arbitrator's fee. Each party is responsible for covering their own attorney's fees and associated expenses.
In summary, the arbitration clause means that franchisees must resolve most disputes with Coffee News through arbitration rather than litigation, which can potentially save time and money. However, the franchisee retains the right to seek immediate court intervention for actions that could cause irreparable harm.