Is the arbitrator's award in a Counselor Realty franchise dispute final and binding?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.1 Arbitration. Except as provided below, any dispute arising under or in relation to this Agreement shall be resolved by binding arbitration by the National Center for Dispute Settlement, under its rules for expedited commercial arbitration, in Minneapolis, Minnesota. Each claim or controversy will be arbitrated by Franchisee on an individual basis, and will not be consolidated in any arbitration action with the claim of any other franchisee. The award of the arbitrators is final and binding on all parties. The arbitrators may issue appropriate orders as well as award monetary (but not exemplary or punitive) damages. The prevailing party will be entitled to recover its costs including its reasonable attorneys' fees. We may sue to collect money owed to us, to protect or enforce our rights in the Marks, or to compel inspections or audits.
Source: Item 22 — CONTRACTS (FDD page 32)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, disputes arising from the franchise agreement will be resolved through binding arbitration. This means that if a disagreement occurs between Counselor Realty and a franchisee, they must submit to arbitration, a process where a neutral third party (arbitrator) hears both sides and makes a decision.
The FDD specifies that the arbitration will be conducted by the National Center for Dispute Settlement, following its rules for expedited commercial arbitration, and will take place in Minneapolis, Minnesota. Each claim will be handled individually, without consolidation with other franchisees' claims. Importantly, the arbitrator's award is described as final and binding on all parties involved.
This has significant implications for a prospective Counselor Realty franchisee. It means that once the arbitrator makes a decision, both Counselor Realty and the franchisee must abide by it, with limited options for appeal. While the arbitrator can issue orders and award monetary damages, they are specifically prohibited from awarding exemplary or punitive damages. The prevailing party in the arbitration is entitled to recover their costs, including reasonable attorney's fees. However, Counselor Realty retains the right to sue a franchisee to collect money owed, protect their trademarks, or compel inspections or audits, which bypasses the arbitration requirement.