Are all disputes with Counselor Realty resolved by individual binding arbitration?
Counselor_Realty Franchise · 2025 FDDAnswer from 2025 FDD Document
10. RESOLUTION OF DISPUTES.
- 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.
- 10.2 Injunctive Relief. Your breach of this Agreement could cause irreparable damage to Counselor or to other franchisees. Therefore, upon a breach or threatened breach of any of the terms of this Agreement, we are entitled to an immediate injunction restraining such breach and/or a decree of specific performance, pending arbitration or adjudication, without bond, or having to show or prove any actual damage, and without regard to the availability of an adequate remedy at law.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 25–29)
What This Means (2025 FDD)
According to Counselor Realty's 2025 Franchise Disclosure Document, most disputes are resolved through individual binding arbitration. Specifically, any dispute arising under or in relation to the Franchise Agreement will be resolved this way, with the arbitration taking place in Minneapolis, Minnesota, under the rules of the National Center for Dispute Settlement. Each claim must be arbitrated individually and cannot be consolidated with claims from other franchisees. The arbitrator's award is final and binding, and they can issue orders and award monetary damages, but not exemplary or punitive damages. The prevailing party is entitled to recover costs, including reasonable attorney's fees.
However, there are exceptions to this arbitration requirement. Counselor Realty retains the right to sue a franchisee in court to collect money owed, to protect or enforce their rights in the Marks, or to compel inspections or audits. Additionally, Counselor Realty can seek injunctive relief in court for breaches or threatened breaches of the Franchise Agreement, as such breaches could cause irreparable damage to Counselor Realty or other franchisees. In these cases, Counselor Realty is entitled to an immediate injunction or a decree of specific performance without needing to post a bond or prove actual damages.
This means that while most disputes will be handled through arbitration, franchisees should be aware that Counselor Realty can pursue legal action in certain situations, particularly those involving financial obligations, intellectual property, or breaches of contract that could harm the brand. The provision for injunctive relief is fairly standard in franchising, allowing the franchisor to quickly address actions that could damage the system. The individual basis for arbitration is also typical, preventing franchisees from joining together in class-action type claims against Counselor Realty.