Under what circumstances can Counselor Realty sue a franchisee instead of arbitrating?
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.
- 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 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 are generally resolved through binding arbitration. However, Counselor Realty retains the right to pursue legal action in specific circumstances.
Counselor Realty may sue a franchisee to collect money owed to them. They can also sue to protect or enforce their rights related to the Counselor Realty trademarks. Additionally, Counselor Realty can sue to compel inspections or audits of the franchisee's business operations.
Furthermore, Counselor Realty is entitled to seek an immediate injunction and/or a decree of specific performance in the event of a breach or threatened breach of the Franchise Agreement terms by the franchisee. This remedy is available pending arbitration or adjudication, without the need for Counselor Realty to post a bond or prove actual damages. This also applies without regard to the availability of an adequate remedy at law.